Facebook Stock Sinks Amid Social Media Giant's Data Breach Fallout

Mark Zuckerberg -Annual Allen & Company Sun Valley Conference -Getty-H 2017
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Analysts say that Facebook is going through its "darkest hour."

In hindsight, actor Jim Carrey was onto something when he tweeted he was dumping his Facebook stock due to the social media company's alleged role in allowing Russians to meddle in the U.S. presidential election.

Since Carrey's Feb. 6 tweet, Facebook shares have fallen 11 percent as news of a scandal involving a political consulting firm linked to President Trump's campaign has spread, prompting CEO Mark Zuckerberg to tell CNN that perhaps it's time for lawmakers to consider regulating Facebook.

The stock was off 3 percent on Thursday as the Dow Jones Industrial Average plunged 724 points.

Like Carrey, Zuckerberg has also been offloading Facebook stock, selling about $900 million worth so far this year, according to Securities and Exchange Commission filings, though the sales are part of a predetermined plan he has set up.

Even after the stock's fall, Facebook, which is accused of improperly sharing user data with Cambridge Analytica, remains one of the nation's 10 most valuable companies, with a market capitalization of $480 billion, more than the combined value of Disney, Comcast, Time Warner, 21st Century Fox, Viacom and CBS.

The controversy has led to calls for advertiser boycotts from left-leaning activists while Media Matters for America, which named Zuckerberg its "misinformer of the year" in 2017, launched a petition Wednesday demanding that Facebook "ban every entity" using Cambridge Analytica's data.

Facebook, which has already suspended Cambridge Analytica from its platform, did get a vote of confidence from one Wall Street firm on Wednesday when Evercore ISI analyst Anthony DiClemente reiterated his "outperform" recommendation on the stock.

"There has been little evidence of users or advertisers boycotting Facebook at scale as a result of controversies related to the 2016 election," DiClemente said.

On the other hand, the analyst also acknowledged that Facebook is going through its "darkest hour" this week, and Brian Wieser of Pivotal Research said Facebook "is exhibiting signs of systemic mismanagement," adding that he has a "negative view on the stock."

And while progressives are attacking Facebook now, conservatives have been doing so for a few years already. In 2016, Zuckerberg, for example, met with Glenn Beck and other conservatives who complained that right-leaning news stories and opinion pieces were getting short-shrift on the platform.

Now, there are several congressional committees asking Zuckerberg and other Facebook executives for explanations, and hearings over Cambridge Analytica are possible, but lawmakers on the right are gearing up for possible hearings over the way Facebook, Twitter and social media in general treat conservatives, insiders have told The Hollywood Reporter.

"Facebook has addressed some of its problems, and presumably will address the remainder or eventually be compelled to do so," said Wieser, who rates the stock a "sell."