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Why is meta platform (FB) stock down 8% today?


  • Metaplatforms (NASDAQ:Facebook) is down almost 10% this morning
  • A 2016-related DC Attorney General lawsuit Cambridge Analytica data breach personally named Meta CEO Mark Zuckerberg
  • FB stock could also suffer from a sell-off in tech stocks today after Instantaneous (NYSE:INSTANTANEOUS) lowered its revenue outlook this quarter

Source: Blue Planet Studio / Shutterstock.com

Metaplatforms (NASDAQ:Facebook) the stock is down more than 8% at the time of writing on a number of bearish news stories for the company. A lawsuit yesterday afternoon accused Meta chief executive Mark Zuckerberg of being personally responsible for the 2016 Cambridge Analytica data breach. FB stock is also likely caught in the tech stock selloff that gripped the markets today, after Instantaneous (NYSE:INSTANTANEOUS) lowered its quarterly forecast.

On Monday, Washington DC Attorney General Karl Racine filed a lawsuit against Zuckerberg. In the lawsuit, Racine alleges that Zuckerberg failed to oversee consumer data privacy, which indirectly led to the Cambridge Analytica scandal.

The Cambridge Analytica scandal refers to the infamous 2016 data leak that exposed the data of millions of Facebook users. The British consulting firm fraudulently collected user data on up to 87 million Facebook users. Racine claims the leak was actually an attempt to sway the 2016 election in favor of former President Donald Trump.

Racine commented on the nature of the charges:

“This unprecedented security breach exposed tens of millions of Americans’ personal information, and Mr. Zuckerberg’s policies enabled a years-long effort to mislead users about the extent of Mr. Zuckerberg’s wrongful conduct. Facebook. This legal action is not only justified, but necessary, and sends the message that business leaders, including CEOs, will be held accountable for their actions. »

This is apparently the latest controversy update.

FB Stock sinks on Zuckerberg lawsuit, Snapchat earnings

This isn’t exactly Meta’s first intervention related to the Cambridge Analytica scandal. In 2019, the Federal Trade Commission fined the company $5 billion for the data leak.

The social media company has also faced international consequences for its role in the privacy breach. In January, the company was sued for more than $3 billion in damages in a UK court over 44 million UK-based users caught in the act of exploitation.

Facebook could also fall in a general selloff today. The tech-heavy Nasdaq is down 3.68% this morning after Snap lowered its quarterly forecast, citing a deteriorating macroeconomic environment. SNAP stock is down 40% at the time of writing, on track for its worst intraday drop in its history. Snap’s fall caused a crash in tech stocks, with Meta falling in tow.

As of the date of publication, Shrey Dua does not hold (either directly or indirectly) any position in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to InvestorPlace.com publishing guidelines.

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