Facebook shares drop for third day over data case
By Associated Press | Published: 21st March 2018 06:02 PM |
Last Updated: 21st March 2018 06:02 PM | A+A A- |
Image used for representational purpose. (File photo | Reuters)
LONDON: A sell-off in Facebook shares is heading into the third consecutive day, with almost $50 billion in market capitalization evaporating since the start of the week.
The stock fell 1.5 percent before the opening bell Wednesday and, after falling 9 percent, it's one of the worst weeks in company history.
Governments on both sides of the Atlantic are calling for CEO Mark Zuckerberg to testify on the issue, but he has been silent since a story broke Friday about how a firm tied to the campaign of Donald Trump improperly lifted data on 50 million Facebook users.
That firm, Cambridge Analytica, suspended CEO Alexander Nix pending an investigation.
Company filings show that Trump-affiliated data-mining firm Cambridge Analytica has a link to a Chinese security and logistics company run by Erik Prince, the former mercenary who founded private military company Blackwater.
British corporate records show that Alexander Nix, the suspended chief executive of Cambridge Analytica, is also director of a company called Emerdata Ltd. that was incorporated in August 2017.
Other Emerdata directors include people associated with Cambridge Analytica, along with Johnson Ko Chun Shun, who was appointed in January.
Ko is also deputy chairman of Hong Kong-based Frontier Services Group, whose chairman is Prince.
FSG has attracted attention because of concerns Prince plans to provide special forces veterans to assist Chinese companies investing in risky locations overseas.
China's biggest state-owned company, Citic, is a major FSG shareholder.
The Cambridge University researcher who developed an app used by Cambridge Analytica to harvest data from millions of Facebook users claims he has been made a scapegoat.
Alexandr Kogan told BBC on Wednesday he believed all the information he provided was obtained legitimately. He said he was approached by Cambridge Analytica, which is being investigated by British and U.S. authorities for possible misuse of data.
He said: "They approached me. In terms of the usage of Facebook data they wrote the terms of service for the app, they provided the legal advice that this was all appropriate."
Kogan admitted he did not ask enough questions about the data use and did not have a lawyer review the agreement.
Cambridge Analytica has suspended its top executive as possible misuse of data is checked.
