Facebook Inc. (FB) shares were down 3% by Friday's close in a continuing fallout from a New York Times story that argued the firm failed to respond to such problems as fake news, malicious content and Russian interference in U.S. elections via social media.
FB dropped $4.32 to $139.53 after earlier hitting a new 52-week intraday low of $137.77. The stock is down nearly 36% since July, when it reported heavier spending on security and fraud issues.
Shares have most recently fallen after the Times reported on Wednesday that Facebook's top management, including CEO Mark Zuckerberg and COO Sheryl Sandberg, ignored numerous warning signs of abuse and sought to keep the issues under wraps. The paper also said Facebook hired a public-relations and opposition-research firm that used aggressive tactics to circulate negative stories about Facebook's rivals, including linking them to the liberal financier George Soros.
The Times based the article on interviews with current and former Facebook executives and other employees, lawmakers and government officials, lobbyists and congressional staff members. Facebook fired the PR firm, and Zuckerberg said he was unaware that Facebook had been working with the company until he read the Times story.
In a Thursday blog post, the company added that "we've acknowledged publicly on many occasions -- including before Congress -- that we were too slow to spot Russian interference on Facebook, as well as other misuse. But in the two years since the 2016 presidential election, we've invested heavily in more people and better technology to improve safety and security on our services."
Nonetheless, Jim Cramer continues to hold the stock in the charitable trust that he runs in connection with his Action Alerts PLUS club for investors, saying that Facebook looks good for the longer term.
"Although the recent performance in the stock has been uninspiring, we thought the most recent earnings -- which featured an operating-margin beat and strong average-revenue-per-user trends -- support positive trends to both the top and bottom lines and in turn will lead to a high market multiple," Cramer and his team wrote in their latest research note to Action Alerts PLUS members. "We reiterate our $200 price target."
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