Tech giant Facebook's share price sank on Wall Street for a second day amid allegations that the data of millions of users was mined by Britain's Cambridge Analytica.
The news dealt a blow to the tech-heavy Nasdaq index in New York yesterday, with other tech stocks like Google and Amazon feeling the burn, but today the index was up about 0.24 per cent at the time of writing. The S&P 50 and Dow Jones indexes were also in the green.
At the time of writing, Facebook was down 4.72 per cent at $164.41, and the negative sentiment around social media firms had spread to stocks including Twitter, which was down 9.23 per cent to $31.75, and Snapchat maker Snap, which was 3.81 per cent lower at $15.80.
"The ripples on the pond continue to make themselves felt, especially in a market where sentiment is so vulnerable to further knocks," said Chris Beauchamp, chief market analyst at IG.
Fiona Cincotta, senior market analyst at City Index, added that increasing fears of regulation were hitting social media stocks: "Investors in internet firms are rarely spooked by regulatory threats but that is not the case this time round.
"Increased regulation could impact on advertising, potentially hitting hard that revenue stream, a bloodline for Facebook. Investors are starting to acknowledge that there is a fundamental conflict of interest at Facebook between its business side and its public, which needs to be addressed," Cincotta said.
Facebook is now being investigated by the US Federal Trade Commission, which is probing whether the firm violated terms of a 2011 consent agreement over how it would handle and notify users to changes to its user data policy.
The firm yesterday said it had hired a digital forensics firm to conduct a "comprehensive audit".
Meanwhile, the UK's information commissioner is seeking an urgent warrant to gain access to Cambridge Analytica's London offices. The data firm yesterday "strongly" denied allegations that it harvested Facebook data to influence the 2016 US election.
British MPs are also calling Facebook's boss Mark Zuckerberg to give evidence to the Department for Digital, Culture, Media and Sport select committee.
[contf] [contfnew] 
CityAM
[contfnewc] [contfnewc]
