Snap sinks as Facebook fallout ripples throughout tech
- Snap shares are down about 4% Monday as Facebook woes weigh on tech stocks.
- Over the weekend, news broke over that Cambridge Analytica, a political research company, had accessed 50 million Facebook user profiles illegitimately.
- "Investors are concerned about regulatory impacts on internet companies," Macquarie analyst Ben Schachter told Business Insider.
Snap shares are under pressure Monday as the fallout from Facebook's woes sends ripples throughout the tech sector.
Over the weekend, news broke over that Cambridge Analytica, a political research company, had accessed 50 million Facebook user profiles illegitimately. The information was allegedly used for highly targeted political ads on Facebook, and may have impacted both the 2016 presidential election and Brexit vote.
"Investors are concerned about regulatory impacts on internet companies," Macquarie analyst Ben Schachter told Business Insider. He added that regulators could respond to news of the breach with onerous restrictions, which could potentially limit the amount of advertising dollars such companies bring in.
While Snap has struggled with its own questionable content in recent days, it was not related to politics. Last week, the company was forced to pull an ad from its Snapchat app which asked users whether they'd rather "slap Rihanna or punch Chris Brown." That was in reference to when Brown assaulted Rihanna in 2009.
Snap shares are up 9.94% this year.