Facebook Data Misuse Scandal hits Wall Street; stock drops 6.8% in Monday trading session with tech stocks experienced the bearish pressure. Nasdaq and S&P 500 fell more than 1% after the news gets viral.
20 March, AtoZForex – Facebook shares drop 6.8 percent on Monday after the reports that its user data was misused led to concerns over broader privacy violations. S&P and Nasdaq Index suffered their worst day in just over five weeks. FB share drop wiped nearly $40 Billion off its market value as investors worried new legislation could affect the company’s advertising business. Also, the Tech stocks on U.S market experienced the same.
Facebook Data Misuse Scandal hits Wall Street
Mark Zuckerberg just lost $3.8 Billion over misused data scandal affecting 50 million Facebook users. A political consultancy that worked on President Trump’s campaign gained unbefitting access to data on more than 50 million users.
Also, the FAANG Group consisting Amazon, Apple, Netflix, Alphabet & Facebook skid between 1% and 6.3%.
Shawn Cruz, the senior trading specialist at TD Ameritrade in Chicago said: “Tech companies all use data one way or the other as part of their businesses. They are going to get a lot more scrutiny over what data they are collecting and how they are using it.”
It turned out that Cambridge Analytica, a British data analysis company, secured and analyzed approximately 50 million pages on Facebook’s network of citizens and that these data could have been used during the 2016 campaign in the United States.
Also, the European Union (EU) said that reports that one of the United States President’s Donald Chiefs of Staff has been storing millions of Facebook consumer data are “horrible” and that Europe must protect its citizens.
Moreover, the US and British lawmakers are asking for clarifications on how Cambridge Analytica received access to social network users’ data without their permission. Also, the Secretary-General of Massachusetts announced on Saturday that he is planning to start investigating the case.
Additionally, Elizabeth Denham told BBC Radio “We are looking at whether or not Facebook secured and safeguarded personal information on the platform and whether when they found out about the loss of the data they acted robustly and whether or not people were informed.”
Facebook Stock (NASDAQ: FB ) Technical Analysis
The Facebook, Inc. Common Stock closed at $172.56 down 12.53 (6.77%) on Monday trading session. According to candlestick charts, an evening star on 1-week timeframe was formed yesterday. It signifies that the Facebook might face a bearish move. The market builds strength on a long white candlestick. The second candlestick trades within a small range and closes at or near its open. This scenario generally shows an erosion of confidence in the current trend. Confirmation of the trend reversal is the third black candlestick.
The moving average 50 line is above moving average 100 which signify bearish pressure. A weekly chart shows a significant downtrend after it breaks the strong support levels. According to RSI(14) and MACD(12, 26) charts, selling pressure might be experienced by traders today.
Thus, if the Facebook stock failed to sustain $165- $168 level than a massive drop towards $150 can be seen.
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