The Industry

Is the Worst of the Cambridge Analytica Scandal Over for Facebook?

A man holds a smart phone with the icons for the social networking apps Facebook, Instagram and Twitter seen on the screen in Moscow on March 23, 2018.
A public apology by Facebook chief Mark Zuckerberg, on March 22, 2018 failed to quell outrage over the hijacking of personal data from millions of people, as critics demanded the social media giant go much further to protect privacy. / AFP PHOTO / Kirill KUDRYAVTSEV        (Photo credit should read KIRILL KUDRYAVTSEV/AFP/Getty Images)
Wall Street analysts don’t think people will be deleting Facebook for very long. Kirill Kudryavtsev/Getty Images

If the past week of news cycles has convinced you that Facebook is barely surviving the onslaught of the Cambridge Analytica scandal, cry not for the social network.

It’s true that all the bad news has sent the company’s stock spiraling downward all week. On Monday, two days after the stunning stories in the Guardian and the New York Times that detailed how the data-consulting firm Cambridge Analytica was able to obtain data on millions of Facebook users were published, the company’s stock fell by 6.77 percent. Facebook’s market cap fell by more than $36 billion. As the week continued, the hashtag #DeleteFacebook captured the ire of users upset by the company’s ad-targeting practices and overbroad data collection. By Friday, even serial entrepreneur Elon Musk joined the deserters, deleting the Facebook pages of both Tesla and SpaceX.

All of which means…buy? Now, according to Wall Street analysts, is a perfect time to pick up more Facebook stock. They’re telling their clients that all this bad news will eventually blow over and advising them to buy low. As the controversy begins to recede from the headlines after CEO Mark Zuckerberg’s interview blitz on Wednesday, they probably have a point.

“The firestorm of news headlines, and Facebook’s poor navigation of those, have driven an increase in uncertainty that has far surpassed the risk to Facebook’s cash flow growth, in our view,” analyst Andy Hargreaves of KeyBanc Capital Markets wrote in a note to clients Tuesday, according to CNBC. “We recommend investors buy Facebook at current levels and see potential catalysts in earnings, a reasonable response from the Company, and the passage of the height of negative headline volume.”

And more: “Despite these negative headlines and increased concerns around user data and regulatory risk, we do not believe Facebook’s business is currently being impacted,” JPMorgan analyst Doug Anmuth said in a note to clients, reported Investor’s Business Daily on Tuesday.

By Friday, two days after Zuckerberg’s interviews in Wired, CNN, the New York Times, and Recode—where he apologized and said that he’d be open to some form of regulation (without going into a great deal of specifics)—Facebook had jumped from the 12th ranking in Apple’s App Store at the end of last week to the 8th, according to a BuzzFeed report on Friday.

While public scrutiny of the major internet companies has grown steadily over the past two years, it’s unclear whether this past week’s revelations will leave an indelible mark in anyone’s memory—or more importantly, lead to more regulations of or substantive new policies at Facebook. Then again, the news may have slowed, but it hasn’t stopped: On Friday evening, British government officials raided the London headquarters of Cambridge Analytica. You can bet Facebook executives will be paying as close attention as anyone to what the U.K. investigators find.

Read more from Slate on Cambridge Analytica.