Facebook shares fall 5% on report of ‘systemic problems’ in data breach
Shares of Facebook fell by almost 5 percent on Monday following research claiming the recent data breach that exposed 50 million people is a systemic problem for the social network.
It was "made clear in the reporting is that Facebook did not make sufficient efforts to recover users' data, which then informed ad targeting in the 2016 US election. It also did not disclose the leak to users or investors," Pivotal Research analyst Brian Wieser wrote in a note to clients Monday, as quoted by CNBC.
"We think this episode is another indication of systemic problems at Facebook … We see enhanced risks for the company, but no near-term tangible impact on its business."
The company recommends selling Facebook shares, saying they are likely to fall from $185 to $152 per share. "Regulators will take a tougher line on sharing data across Facebook's apps, especially including WhatsApp and the core Facebook platform."
Data analytics firm Cambridge Analytica, which worked for President Donald Trump’s election team, harvested private information from more than 50 million Facebook users, the New York Times and London’s Observer reported last week. Facebook said it was suspending Cambridge Analytica after finding data privacy policies had been violated.
Facebook denies the breach, saying “the claim that this is a data breach is completely false,” and that no data was stolen.
For more stories on economy & finance visit RT's business section