This week proved to be an enormously entertaining and contentious time for big technology. The news of Amazon’s location for HQ2 was overshadowed by Facebook’s devastating scandal, which was published in the New York Times. The main focus of the story in the Times seems to be the manner that Mark Zuckerberg and Sheryl Sandberg, Facebook’s top two executives, react to bad news. The Times states that the two tend to “delay, deny, and deflect.” And the result: “bent on growth, the pair ignored warning signs and then sought to conceal them from public view.” In addition to this particular lack of initiative, Facebook had also hired Definers, which is an opposition- research specialist based in Washington, a decision that had unintended and problematic consequences. To add to the drama, Zuckerberg denies that either he or Sandberg had ever heard of Definers before the article was published.
Either way, Facebook experienced the negative symptoms. Their shares closed at $139.53 on Friday. This was a steep drop for the big technology corporation. This price put Facebook down 36% from their high of $218.62 in July, which was less than four months ago. Collectively for Facebook, that is a loss of $228 billion in market capitalization and could be a sign that many in the market have little faith in Facebook executives.
Moreover, Facebook’s board does not have the ability nor the inclination to fire Zuckerberg. It does not mean he will not resign. At any point, Mr. Zuckerberg has the freedom to hand in his resignation and allow someone else to help right the shaky ship. Furthermore, the bottom line seems to be that Facebook has been moving from crisis to crisis with little or no dexterity. It seems that this weight falls on Facebook executive’s shoulders.
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