Ever since the company was founded in 2005, Facebook has continued to be one of the most significant and important organizations in the world. Facebook is the leading social media provider in the world and has a major impact on a lot of different aspects of life. Over the past few months, the company has gone under a significant amount of scrutiny due to the reports that some user data was shared for informational purposes that had to do with the 2016 general election in the United States.
One of the biggest stories about this specifically has to do with the firm Cambridge Analytica, which is a firm that is able to collect data and then use it to analyze and then make decisions about marketing for other firms. It has recently been reported that as many as 90 million different users of Facebook could have had their information used for this purpose without their knowledge (https://www.washingtonpost.com/news/worldviews/wp/2018/04/05/as-facebook-confronts-tough-questions-on-data-misuse-europe-might-force-real-change/?utm_term=.a882c28b47d1).
Now that this information has been made publicly available, many people are beginning to push back on their use of the social media giant. So far, Facebook appears to continue to be moving in the positive direction and the senior leadership of the company has been more than cooperating with investigations. However, it remains to be seen how this could impact the company going forward.
In the meantime, all of these allegations and stories have come at cost to shareholders of Facebook. After the stock looked like it was going to soon hit $200 per share for the first time, bad news pushed the stock down to around $150 per share. The stock will likely continue to be volatile in the coming weeks as the story continues to unfold.
While there is a clear risk to shareholders of the stock, it is unlikely that this will be too much of an issue for Facebook to overcome. However, it will make the company look at the ways it uses user data in the future. Facebook is also looking for ways to help control fake accounts and fake news, which has been used to influence people for years. All of these procedures will help to control the environment and ensure people are able to use the website for productive reasons going forward.