Facebook, Inc. Common Stock (NASDAQ:FB) has confessed that the recently revealed data breaches were far more extensive than initially reported. Ina blog post outline how it intends to protect its users’ information, the company has revealed that data belonging to upto 87 million users may have been shared with Cambridge Analytica, which is 37 million more than what was initially revealed.
In a conference call just after the post was published, the company’s CEO Mark Zuckerberg said that it was hard to tell how much data may have fallen in the hands of Cambridge Analytica and noted that 87 million was the worst case scenario. Zuckerberg also said that the backlash from the data leak allegations including the #DeleteFacebook hashtag has not affected ad buys or user numbers in a big way. The company’s downtrodden shares went up 3% in pre-market trading on Thursday.
The social media giant has been waging in a scandal involving data leakage but as reports indicates; many advertisers are not planning to cut their budget. This is according to a conversation with seven of Facebook’s employees and who are actively involved in media and advertising industry. Many of these people requested to remain anonymous because they are not allowed to disclose their relationship with the company.
Adverting companies and agencies have been keenly following the events and many are worried about the social network which seem be moving from one controversy to the other over the past one year. Some of the major scandals that have rocked the company are acting as an avenue for Russia to interfere with the 2016 US election and many cases of misreporting important advertising metrics.
According to one source, the Cambridge Analytica scandal was just one the major situation that Facebook is grappling with. Although that alone may not be so much concerning, everything put together is making the social media company lose the field to digital advertising competitors.
Many companies are looking for two possible steps to take in the wake of the Cambridge Analytica fiasco- whether the scandal will spark off a massive user exodus and whether the tighter and stricter data safeguard that Facebook is planning will put a limit on the advertisers’ ability to effectively target users. According to Parker Ray, a chief digital strategist at agency MWWPR, Facebook will only start attracting advertisers if the changes that it is proposing make a strong impart by protecting brands’ data from being consumed.
This report is for information purposes only, and is neither a solicitation or recommendation to buy nor an offer to sell securities. Financials Trend is not-a-registered-investment-advisor. Financials Trend is not a broker-dealer. Information, opinions and analysis contained herein are based on sources believed to be reliable, but no representation, expressed or implied, is made as to its accuracy, completeness or correctness. The opinions contained herein reflect our current judgment and are subject to change without notice. Financials Trend accepts no liability for any losses arising from an investor's reliance on the use of this material. Financials Trend sometimes gets compensated up to one hundred and fifty thousand dollars per month for featuring particular stocks. See site disclaimer for complete compensation. Financials Trend and its affiliates or officers currently hold no shares of these stocks. Financials Trend and its affiliates or officers will purchase and sell shares of common stock of these stocks, in the open market at any time without notice. Financials Trend will not update its purchases and sales of these stocks in any future postings on Financials Trend's websites. Certain information included herein is forward-looking within the context of the Private Securities Litigation Reform Act of 1995, including, but not limited to, statements concerning manufacturing, marketing, growth, and expansion. The words "may", "would," "will," "expect," "estimate," "anticipate," "believe," "intend," " project," and similar expressions and variations thereof are intended to identify for ward-looking statements. Such forward- looking information involves important risks and uncertainties that could affect actual results and cause them to differ materially from expectations expressed herein. *Financials Trend does not set price targets on securities. Never invest into a stock discussed on this web site or in this email alert unless you can afford to lose your entire investment.