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Slide In Facebook Stock Continues On Damaging Revelations

Facebook stock dropped again Monday, continuing a slide that began last month with a series of critical articles published by the Wall Street Journal, and followed up by a company whistleblower revealing herself Sunday.




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Frances Haugen, a former Facebook (FB) product manager, unmasked herself in a “60 Minutes” interview Sunday as the source of internal documents used for the Wall Street Journal stories. The interview on CBS heightened an already high level of criticism against Facebook. The criticism has led to Senate hearings about regulating the company.

The WSJ series, called the Facebook Files, described how the social media giant’s rules favored elites, how its articles fostered discord, how drug cartels and human traffickers use its platform, and the effects of its Instagram platform on the mental health of teenage girls.

Facebook stock dropped 5.5%, near 324.15, during afternoon trading on the stock market today. That’s its lowest price since June and well below Facebook’s 50-day moving average.

The revelations in the Wall Street Journal series of articles, in addition to the documents Haugen gathered, also included interviews with current and former Facebook employees. Haugen, 37, was Facebook’s lead product manager on the civic integrity team. She worked at Facebook for less than two years.

The Impact On Facebook Stock

Since the series of Journal articles began on Sept. 13, Facebook stock is down about 14%

A bio on Haugen that posted Sunday after the interview said she became increasingly alarmed by the choices Facebook was making. She said Facebook prioritized its own profits over public safety and put people’s lives at risk.

“As a last resort and at great personal risk, Frances made the courageous act to blow the whistle,” the bio said.

In a follow-up story by the Journal after the “60 Minutes” interview, Haugen said she hopes to help Facebook, not destroy it.

“If people just hate Facebook more because of what I’ve done, then I’ve failed,” she said.

“I believe in truth and reconciliation, and we need to admit reality,” she said. “The first step of that is documentation. The question, as always, is: Will advertisers and investors care about any of this?

Facebook Responds To Interview

Lena Pietsch, Facebook’s director of policy communications, responded to the “60 Minutes” report with the following written remarks:

“Every day our teams have to balance protecting the right of billions of people to express themselves openly with the need to keep our platform a safe and positive place,” the statement said. “We continue to make significant improvements to tackle the spread of misinformation and harmful content. To suggest we encourage bad content and do nothing is just not true.”

Facebook, Amazon (AMZN), Apple (AAPL) and Alphabet‘s (GOOGL) Google have been under intense scrutiny by Washington lawmakers that have threatened to hit Big Tech over allegations of antitrust violations.

Facebook stock has fallen 16% from its record high set on Sept. 1.

Please follow Brian Deagon on Twitter at @IBD_BDeagon for more on tech stocks, analysis and financial markets.

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