Last month, a controversy appeared in the media proclaiming that Facebook sold data of its users secretively for influencing their choices for presidential elections in the United States. In the wake of this controversy, Edward Snowden, a former NSA contractor posted a tweet claiming that Facebook is a surveillance company that has rebranded itself as a social media platform. In a response to such speculations, the Facebook CEO Mark Zuckerberg accepted in the public that Facebook has failed in protecting the data of its users and said that he himself should be considered responsible for this failure. Consequently, severe criticism arose in the media against Facebook, which also led to the tumbling of share prices of Facebook that subsequently resulted in the loss of personal net worth of Mark Zuckerberg. The question here is that should such a situation be considered as the end of the beginning and whether should Mark Zuckerberg should cash in the shares of Facebook? This article will move on to answer this question by mentioning recent facts.
The Loss in Market Capitalization of Facebook:
The Facebook Corporation started the year 2018 with a total number of users of around 2.13 billion worldwide and a total market capitalization worth of beyond $540 billion. Until 16th March 2018, the company was at a $538 billion market value and its shares were also quite stable. However, after that, the emergence of Cambridge Analytica controversy affected the shares prices significantly. By Monday 9th April 2018, the price of Facebook shares declined to as low as $160 per share and the company lost a net valuation of around $100 billion in the stock market making.Its total market capitalization value fell to $440 billion from $538 billion within a passage of time of only 20 days. Facebook CEO Zuckerberg who owns the highest number of shares of Facebook also lost up to $14 billion of his net worth.
Mark Zuckerberg appeared before Congress:
However, in the wake of all the negative talking regarding Facebook on the media and in the stock market, Mark Zuckerberg appeared on Tuesday 10th April 2018 in front of the U.S. National Congress. Surprisingly, the majority of the Congressmen who went on to ask questions to Zuckerberg were, in actuality, unaware of the framework of functionalities of Facebook and of the digital world. Therefore, Zuckerberg was smarter enough to either divert or respond well to the questions of Congressmen apparently in a manner that portrayed him as an intelligent CEO who was able to defend his company confidently and very smartly in front of the U.S. Congressmen. He tended to stay on the topic on Facebook and even ratified the irrelevant questions from Congressmen as �not related to the mechanisms of Facebook’. For example, when a Congressman asked him a question about how many data categories does Facebook store, Zuckerberg simply replied that he does not even know what the Congressman is referring to. Such answers left the Congressmen bamboozled in thinking what to ask Zuckerberg who had the better know-how of the information sharing mechanism entailed in the digital framework of Facebook.
Increase in Share Prices on Facebook:
In consequent to Zuckerberg’sconfident appearance in front of the Congress and answering of the questions in a non-timid manner, the Tuesday 10th April 2018 ended in bestowing Facebook a 4.5% boost in its stock prices. This also resulted in the gain in the market value capitalization of Facebook as well as in an increase in the net worth of Zuckerberg. He is now the 7th richest person in the world with a net worth of around $66 billion. This sudden increase in the value of Facebook stock prices indicates the confidence of Facebook users and investors over this corporation. Even a mere confident appearance of Facebook CEO in front of Congress can give such a high market boost to Facebook. Likewise, another similar but smarter move by Facebook or by its CEO can further restore the confidence of Facebook users over this social media platform. Consequently, it can be conceived that the scandals such as Cambridge Analytica are insufficient enough to take down the Facebook on a permanent basis, and can only affect it on a transitory basis.
The Concerns of Common Man:
It is pertinent to mention here that a common man may have no particular interest in what all is going on in the Cambridge Analytica controversy. Such scandals only make the elites, especially the politicians, ministers, businessmen, and prominent members in the society cautious of using Facebook, because stealing their data can affect them more sturdily as compared to the theft in the data of a common man. For example, a pizza seller or a waiter or a common labourer may remain unaffected whether his Facebook data is surreptitiously shared by the Facebook Corporation with anyone unless it hits his personal life or his job. Furthermore, the majority is still unaware of the details of the Cambridge Analytica scam. That is the reason why the total number of Facebook users has not declined yet and neither is it expected that it would fall below the two billion users threshold in this month or in the coming months unless something more serious affects Facebook.
In a nutshell, Facebook is largely a social networking platform on which as high as two billion people are connected with each other. Such a vast number of people spend time on Facebook in order to make their time a little more amusing and fun-oriented. Although there are several other social networking platforms such as Twitter, Instagram, Pinterest, etc., none of them has become so much popular and convenient to use as the Facebook has been for its users. Thus, it is highly unlikely that such a high number of users would suddenly stop using the platform merely due to an elections-related controversy. Majority of the users are not even concerned with politics and they use Facebook only for connecting with their friends. So, it remains certain that the Facebook will continue to move on leaving behind the scandals such as Cambridge Analytica and it will likely cash-in on new opportunities for increasing its user growth.
Written by: Daniel Flegg a Bclique entreprenuer
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