DLPR’s President Weighs in on Facebook’s Latest Communications Crisis

Mark Zuckerberg’s leadership called into question as Facebook controversy continues

Mark Zuckerberg’s prolonged silence in the midst of the firestorm surrounding Cambridge Analytica’s access to Facebook Inc. user data has one expert questioning whether he is suited to be the company’s leader.

In the past few days, Facebook FB, +0.18% has drawn scrutiny from governments around the world and seen its stock take a beating, with shares down 8.7% for the week to date, shaving more than $45 billion off its market cap.

Zuckerberg did not publicly comment on the matter until a post on Wednesday afternoon.

“I’ve been working to understand exactly what happened and how to make sure this doesn’t happen again,” he said. “But we also made mistakes, there’s more to do, and we need to step up and do it.”

Seth Linden, president of Dukas Linden Public Relations, said the company needs to “not only take stock of its internal governance, but also take stock of how it communicates issues and why it’s slow to respond to major crisis matters.”

Facebook “immediately banned” Cambridge Analytica from using its services once it learned that the company hadn’t deleted data “as they had certified,” he said.

Zuckerberg’s inaction had others asking questions as well.

“If they’d said we realize there’s an issue and we’re proactively changing, I think that investors, politicians, and lawyers would view it differently and give them more support,” said Scott Freeze, chief investment officer at Sabretooth Advisors, which manages the New Tech and Media ETF FNG, -0.62% “Instead they go into hiding and say we want to get our story straight, which is kind of a bogus answer. That leaves another bad taste in people’s mouths.”

He questioned whether Facebook has “grown in a manner that has proven to be untenable or whether it needs to significantly improve how it is managed.”

And with midterm elections right around the corner, Facebook doesn’t want to be a D.C. target.

“They’ll survive this but need to look in the mirror and re-evaluate where they want to be,” he said.

Facebook shares have gained 22% for the past year while the S&P 500 indexSPX, -0.18% is up 16% for the period and the Dow Jones Industrial AverageDJIA, -0.18%  has gained about 20%.



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