Phew! It was touch-and-go there for a little, but Mark Zuckerberg can now rest easy — Facebook’s stock price has rebounded to pre-scandal levels. And it only took a couple of months!
Shares of Facebook were trading around $186 this morning, meaning that Facebook has regained all of the value it lost when The Guardian and the New York Times revealed that data firm Cambridge Analytica had purchased data on millions of Facebook users from researcher Aleksandr Kogan. Following the disclosures in March, Facebook’s stock dropped 13 percent.
What a remarkable turnaround! How did Facebook pull off such a feat? Maybe it was meaningful changes to its data-collection practices (it wasn’t). Maybe it was Mark Zuckerberg thoroughly and comprehensively answering questions before Congress last month (he didn’t). Maybe it was Facebook’s clear and honest communication with users about what went wrong and what is being done to fix it (nah). Maybe it was because Facebook changed its business model after advertisers took a moral stand on Facebook’s deceptiveness (LMAO).
Or maybe it was the fact that Facebook has virtually no competition in the social networking space. It owns many of the most-used mobile apps on the planet — including Instagram, Messenger, WhatsApp, and Facebook itself — and there are no regulations to ensure that it faces real outside competition in the marketplace. What sort of business is able to retain its value and its control of the marketplace even in the face of user backlash and widely criticized business practices? That wouldn’t be a monopoly would it?