Facebook stock jumps higher as Mark Zuckerberg testifies
Facebook shares jumped roughly 4.5 percent to $165 as Facebook CEO Mark Zuckerberg answered lawmakers' questions -- a sharp gain for a stock that had been battered in the wake of the Cambridge Analytica scandal.
On March 16, Facebook (FB) closed at $185.02. That was the Friday before revelations of the misuse of data.
The price started dropping the following Monday -- and kept sliding.
A week later, on Monday, March 26, the FTC announced it was investigating whether Facebook violated an earlier settlement. The stock bottomed out at $152.20 the following day.
Shares have slowly climbed back. With Tuesday's gain, shares are down about 11 percent since the scandal broke. That represents nearly $50 billion in market value.
Wall Street was watching how well Zuckerberg would perform in front of two Senate committees.
"Zuckerberg is actually testifying before more senators than a nominee to the Supreme Court would," said Marc Rotenberg, president and executive director of the Electronic Privacy Information Center, which is critical of Facebook's data collection.
If Congress indicates an appetite for increased regulation of companies' access to personal data—as a number of senators have begun to do— that's a risk for Facebook shares.
For now, its business model appears relatively safe, said analysts for UBS in a research note Monday.
"While there has been a movement to 'delete Facebook' (#DeleteFacebook), early app usage and rankings data suggests that there has been no (lasting) impact on any of the metrics," UBS wrote, predicting that stricter U.S. privacy laws were "unlikely over the near to medium term." UBS projects that Facebook's ad revenues would continue to grow at a compounded growth rate of 20 percent a year—a prediction unaffected by the current scandal.
