Facebook Inc. (FB) - Get Report stock was up almost 3% to $159.45 in late morning trading after CEO Mark Zuckerberg addressed the growing Cambridge Analytica issues, as well as new data security problems.
Zuckerberg spoke to reporters on a conference call Wednesday afternoon, answering questions about the company's updated estimate that as many as 87 million users' data may have been accessed by Cambridge Analytica, and that bad actors likely used other means like the platform's search and recovery tools to scrape public profile data.
Wedbush analyst Michael Pachter said that Zuckerberg's talk was another example of the CEO "handling [the scandal] with contrition and grace."
"Zuckerberg addressed most of the common concerns and made it very clear that Facebook would work to monitor privacy, block access by third parties, audit prior use and cooperate with regulators to ensure that user data is protected. There's not much more he could say or do at this point, and I think he did a pretty solid job."
In a note, Deutsche Bank analyst Lloyd Walmsley reiterated the firm's buy rating on the stock, writing that Zuckerberg's comments on Wednesday imply that the social media giant has not seen any significant user or advertiser impact from the scandal.
That, along with Zuckerberg's tone on the call, "[suggests] to us that the worst is likely behind FB and the narrative (and multiple) can likely improve from here, though admittedly a lot rides on Zuckerberg's congressional testimony next week," Walmsley wrote. Zuckerberg plans to testify before the Senate Judiciary and Commerce Committees on April 10 and before the House Energy and Commerce Committee on April 11.
The increase in Facebook's stock price both in after-hours trading on Wednesday and early on Thursday suggests that investors are pleased with Zuckerberg's handling of the ongoing issues, Pachter said, but we can expect to see continued volatility as Zuckerberg testifies before Congress next week.