It looks like this might turn into something of a shitshow for Facebook over the next several days and that will of course weigh on tech and the broader market more generally if the losses worsen.
FB is off more than 3% premarket:
This is obviously tied to the Cambridge Analytica fiasco and now, government officials want some answers.
“Facebook faces more systemic problems after reports over the weekend associated with a data leak that exposed about 50 million user accounts, enhancing risks of regulatory controls for the social media platform and hampering advertising growth,” a note by Pivotal analyst Brian Wieser reads. “Facebook reports raise risk to the enhanced use of data in advertising, as well as opens up third-party measurement partners to increased restrictions, which may frustrate advertisers,” Wieser – who has a sell rating on the shares – adds.
“Changes to [Facebook’s] business model around advertising and news feeds/content could be in store over the next 12 to 18 months,” GBH’s Daniel Ives writes, in his own note.
Facebook has 43 buys, 3 holds, and 2 sells, with an average price target of $224. It’ll be interesting to see if that changes.
The UK’s Information Commissioner Elizabeth Denham isn’t fucking amused. She’s looking into what exactly went on here and in a web filing on Monday, she says that “a full understanding of the facts, data flows and data uses is imperative for my ongoing investigation,” and that includes “any new information, statements or evidence that have come to light in recent day.” She continues:
Our investigation into the use of personal data for political campaigns, includes the acquisition and use of Facebook data by SCL, Doctor Kogan and Cambridge Analytica. This is a complex and far reaching investigation for my office and any criminal or civil enforcement actions arising from it will be pursued vigorously.
Apparently, the Massachusetts Attorney General is launching an investigation.
— Maura Healey (@MassAGO) March 17, 2018
Amy is furious:
Facebook breach: This is a major breach that must be investigated. Itâ€™s clear these platforms canâ€™t police themselves. I've called for more transparency & accountability for online political ads. They say â€œtrust us.â€ Mark Zuckerberg needs to testify before Senate Judiciary.
— Amy Klobuchar (@amyklobuchar) March 17, 2018
And this just goes on, and on, and on.
Additionally, investors are focused on Apple’s apparent move to develop displays to replace Samsung screens – that’s obviously going to weigh on suppliers and as if this whole thing needed to be any more ominous for tech, this appears to be a problem in Europe:
- MICRO FOCUS EXTENDS LOSS TO AS MUCH AS 58.5%, MOST ON RECORD
That’s a FTSE company but European tech shares are getting crushed broadly, down more than 2% on the day:
Stateside, Nasdaq futures are leading the way lower ahead of the opening bell and it looks like you can expect tech to be the laggard all day long: