Facebook Stock Drops On Cambridge Analytica News Dragging Down Nasdaq

Facebook stock dropped more than 5% at the start of the trading day, dragging the Nasdaq along with it.

Shares had dipped below $175 at the end of the first hour of the session. That’s their lowest level since last October.

The social network’s decline has dragged the Nasdaq down more than 1% thus far, and the Dow 30 and S&P 500 are also in red numbers.

The Facebook selloff was prompted by uncertainty about the company in light of the damaging news over the weekend about its role in a consultant to the Donald Trump campaign’s illicit acquisition and manipulation of user data. A whistleblower who worked for data research firm Cambridge Analytica until 2014 told the New York Times and the UK’s Observer newspaper that data from up to 50 million Facebook accounts was taken without permission.

“We exploited Facebook to harvest millions of people’s profiles,” the whistleblower, Christopher Wylie, told the Observer. “And built models to exploit what we knew about them and target their inner demons. That was the basis that the entire company was built on.” Cambridge Analytica is backed by hedge-funder and longtime Trump supporter Robert Mercer. Steve Bannon, a key adviser to Trump until his ouster a couple of months ago, once sat on the company’s board.

Facebook suspended the firm for violating its terms of service, though Cambridge Analytica fired back yesterday, insisting it was in compliance and minimized its role, insisting that voters could not be swayed by targeted ads. “People are smarter than that,” the company said in a tweet.

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