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Facebook Shares Up Despite Data Breach Fallout

The stock surpassed the $200 mark for the first time on Wednesday.
Alex Hamilton is a regular contributor to numerous news sites.
Alex Hamilton is a regular contributor to numerous news sites.

Shares of Facebook FB hit a new high on Wednesday, as the public shakes off the recent Cambridge Analytica data breach that was scrutinized by the public. The stock surpassed the $200 mark for the first time on Wednesday and is trading higher in the early session today.

Shares are up more than 45% since late march, when news of the data breach first broke. Facebook’s market value is now above $585 billion. Mark Zuckerberg, co-founder and CEO, is now worth more than $75 billion.

Reports revealed that Cambridge Analytica, a British data firm, had improperly accessed the private data of more than 87 million Facebook users.

News of the breach led to some advertisers temporarily pulling their advertisements and many prominent users deleting the app. Users took to social media to encourage business owners and influencers to delete their pages or profiles on Facebook.

In April, Zuckerberg testified before Congress about the company’s data practices and pledged to address data privacy concerns. Facebook has since revamped its internal audit committee and changed its internal practices.

Earlier in June, Facebook also managed to shake off new reports that it shared data with 60 other companies. The company admitted to sharing data with Chinese device makers, which put a slight dent in share prices. But shares have risen 5.4% since the news broke.

Wall Street analysts speculated that Facebook’s user and advertising bases would take a permanent hit after the news of the data breach. But in April, the company announced that its daily active users increased 13% year over year to hit 2.2 billion.

The company’s most recent rally has been fueled primarily by the company’s first-quarter earnings report, which surpassed expectations.

The social network also introduced new ways for video creators to generate income from views. Facebook launched a matchmaking system on Tuesday that will cultivate partnerships between video creators and advertisers. For advertisers, the matchmaking system identifies video creators that may be a good fit for endorsement or product placement deals.

More content creators will also be allowed to include ad breaks in long videos, and they may also offer a $4.99 subscription to fans. Subscribers will receive perks, like exclusive content.

Facebook will not take a cut of subscriptions or partnerships during the testing phase.

The company also unveiled new quizzing and polling features for creators who produce game shows.

The social network’s new partnership feature is an attempt to compete with rival YouTube, which began offering matchmaking services in 2016. YouTube is planning to announce changes to its commercialization options later this week.

Facebook’s rally is also partly driven by the success of Instagram. The visual social network’s advertising revenue is projected to reach $8.9 billion in 2018. Within two years, Instagram is also expected to have 1.4 billion active users.

Shares of Facebook are up 9.3% this year, outpacing the S&P 500’s gains of 2.75%.

Wednesday’s gains come as shares for Twitter rose and Snap Inc. fell sharply. Snap’s stock was pushed lower after Needham released a cautious note.

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