Facebook Loses Around $13 Billion in Value After Data Breach Affects 50 Million of Its Users
2018 continues to be a challenging year for Facebook. The company’s stock closed down 3% Friday following reports that hackers gained access to the personal data on 50 million of its users.
The data breach is the latest in a string of mishaps and controversies that the company has endured, including its involvement in the Russian disinformation campaign during the 2016 U.S. presidential election and Facebook’s sharing its user data in what became the Cambridge Analytica scandal. Facebook CEO Mark Zuckerberg defended his company during two days of Congressional hearings in April.
In the latest incident, Facebook said its engineering team discovered on Tuesday that hackers exploited a vulnerability in Facebook’s code that exposed to attackers its site’s so-called access tokens – essentially, digital keys that allow people to stay logged into Facebook without having to re-enter their password.
“We’re taking this incredibly seriously,” Facebook said in a blog post announcing the breach, adding that the company has fixed the vulnerability and notified law enforcement of the hack.
The company’s swift response did little to settle investor unease about the string of snafus at the social media giant. Facebook’s stock fell as much as 5% to $162.57 a share during intraday trading Friday as news of the hack broke. The stock recovered slightly before the market’s official close, but once it did Facebook’s market cap had lost about $13 billion of its value.
Facebook is one of the four tech giants known on Wall Street as FANG—along with Amazon, Netflix and Google/Alphabet. But Facebook is now the FANG stock with the least amount of bite. Amazon’s stock is up 69% so far in 2018, while Alphabet’s stock is up 12% and Netflix up 86%. Facebook shares, by contrast, are down 9% this year.
Following a rocky IPO in 2012, Facebook’s stock has surged after the company improved its mobile-ad revenue and benefited from its bold acquisitions of WhatsApp and Instagram, two deals that seemed costly at the time but now look prescient. WhatsApp founders left the company in April, however, and have since become open critics of Facebook’s privacy practices. Instagram’s founders departed Facebook this week.