#DeleteFacebook: How socio-political outrage causes company’s value to shrink
By Content-mgr - on March 20, 2018Facebook story unveiling these days is a perfect example of how modern companies are valued – by feelings. If feelings are essentially low, bad or poisoned – markets shrink the companies capitalisations with sparkling speed. If, on contrary, investors, traders feel positive about company’s behavior, profits or management – founders and CEOs are earning bonuses on capital growth. Economics of Feel – the highly likely name of modern capitalism for the future generations to use.
Facebook shares fell 6.8% on Monday, wiping $36.7bn off the value of the company. The sell-off spread to other big tech groups as investors worried about greater government regulation of the sector. Alphabet, the parent of Google, fell 3% while Apple and Amazon shares were down by around 1.5%. Worries of investors wipe out billions of dollars of values. Plain amazing.
Long story short: Politicians call for company’s chief Mark Zuckerberg to testify about privacy breach, after revelations that an analytics firm used by Donald Trump’s presidential campaign improperly received data about 50m users of the social network. News like these can destroy the entire business, yes. It is possible, markets say. If you are weak enough, but that is not the case with the Facebook, isn`t it?
Amazon (NASDAQ:AMZN), Apple (NASDAQ:AAPL), Netflix (NASDAQ:NFLX) and Alphabet (NASDAQ:GOOGL) – all part of the so-called FAANG group, along with Facebook – were down between 1% and 6.8%
Facebook (O:FB) led the losses, tumbling 6.8% as the social media colossus faced demands from U.S. and European lawmakers to explain how a consultancy that worked on President Donald Trump’s election campaign gained improper access to data on 50 million Facebook users. In addition, worries about the potential for a trade war cast a shadow after U.S. President Trump imposed tariffs on steel and aluminum.
Sources:
https://www.investing.com/news/stock-market-news/stock-futures-drop-as-fed-caution-facebook-data-leak-weighs-1347753
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