On Tuesday, Facebook founder and Chief Executive, Mark Zuckerberg, navigated through the first of two U.S. congressional hearings without making any promises to change how the social network does business. In his testimony, though, he did mention how he will make more strict and secure policies for the platform.
During the five-hour questioning by 44 U.S. senators, Zuckerberg repeatedly apologized for a range of problems that have beset Facebook, from a lack of data protection to Russian agents using Facebook to influence U.S. elections.
The company’s shares fell steeply last month after the Cambridge Analytica situation unfolded. This disclosure pitched Facebook into a crisis of confidence among users, advertisers, employees, and investors who were already struggling with Facebook’s reaction to fake news and its role in the 2016 election.
Soon after Mark’s testimony though, shares in Facebook posted their biggest daily gain in nearly two years, closing at 4.5 percent.
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.
Wedbush analyst Michael Pachter said that Zuckerberg’s talk was another example of the CEO “handling 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, “ 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.
