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Facebook’s crisis continues to hurt its stock

Facebook Inc. (FB) seems to be facing another round of trouble. According to a report by The Wall Street Journal, Facebook’s CEO Mark Zuckerberg has taken on an aggressive style of management in recent months, which has resulted in the departure of several executives and a drop in employee morale. Facebook suffered its biggest blow […]

November 19, 2018 3 min read

Facebook Inc. (FB) seems to be facing another round of trouble. According to a report by The Wall Street Journal, Facebook’s CEO Mark Zuckerberg has taken on an aggressive style of management in recent months, which has resulted in the departure of several executives and a drop in employee morale.

zuckerberg at European parliament
Mark Zuckerberg at European Parliament

Facebook suffered its biggest blow this year with the Cambridge Analytica scandal. Following the incident, the company came under scrutiny for various aspects such as the content and third-party apps on its site, targeted advertising, and how it handles users’ data.

After facing heavy criticism from all sides, Zuckerberg told his executive team that he was going to adopt a tougher approach in terms of management. Recall that several top executives have left Facebook this year due to various reasons.

The co-founders of Facebook’s Instagram and WhatsApp divisions left the company reportedly due to disagreements with Zuckerberg over advertising and monetization strategies.

Last week, The New York Times published a report on how Facebook dealt with its scandals and critics. Facebook reportedly dismissed the story and Zuckerberg is said to have warned his employees that speaking to the media would cost them their jobs. Zuckerberg also cited bad morale as the reason for leaks.

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While Zuckerberg was blamed for not being involved enough in crucial decisions related to various incidents, the Facebook chief put the blame for the aftermath of the Cambridge Analytica scandal on COO Sheryl Sandberg.

Survey reveals low employee morale at Facebook

Sandberg was the one who faced the media and even Congress on behalf of the company following the incident, but Zuckerberg said she should have done more in terms of monitoring the content on the site.

Meanwhile, Facebook’s stock is hurting badly. The company is nearing its third consecutive month in red, which will be its longest monthly decline ever. The stock is down 25% so far this year, and experts believe it will continue to struggle in the near-term. Facebook is facing a lot of issues at present and this is likely to take a toll on the stock.

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There are also chances that amid the management crisis, Facebook’s top executives might have to face Congress once more. As of 2:25 pm ET, the stock was down 5.5%.

 

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