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article imageFacebook recovers all its losses from Cambridge Analytica scandal

By Ken Hanly     May 10, 2018 in Internet
Facebook has managed to recoup all of the losses that it had incurred in the wake of the Cambridge Analytica data scandal.
On Thursday Facebook shares hit an intraday high of $185.99 just above their closing price of $185.09 the last trading day before news of the scandal broke.
Facebook's shares plummeted after scandal news broke
On March 20 an article reported that Facebook share prices had dropped 9.5 percent in just two days. $49.6 billion had been wiped off the company's market cap. The Federal Trade Commission (FTC) was investigating the company's use of personal data by the firm to see if it had "violated terms of a consent decree over its use of personal data". On Tuesday, after the announcement, the shares fell 2.9 percent.
The shares had fallen an even larger percentage on Monday, after the news that Cambridge Analytica had accessed data from 50 million Facebook users without their permission.
Facebook enters bear market territory
By March 26, Facebook was officially in bear market territory, down more than 20 percent from recent highs, and shares were at their lowest level since July of 2017. The FTC had confirmed that they were investigating Facebook's privacy policies. The probe sparked fears about government regulation and possible negative effects on the growth of the company. Facebook shares were now down 17 percent for the year to date.
The road to recovery
It has taken a while for Facebook shares to recover from such huge declines but after reporting blow-out first quarter earnings sentiment changed, helped by the fact that the feared drop in users of Facebook had yet to happen. Many analysts also do not believe that the increased regulation expected from Europe will actually come to pass. Company fortunes appear to have recovered from the significant harm that the scandal caused it at first.
Now Facebook shares are up 2.36 percent for this year so far.
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