The market has no desire to wait and see, writes Bloomberg. And with the collapse of Twitter on Friday (-21%, the biggest decline in a single day since February 2014) the star of social networks is increasingly tarnishing. Facebook on Thursday left the beauty of 120 billion dollars of capitalization on the field in a single day, with a 20% drop: also in this case a record. And now comes the first lawsuit against Facebook and its CEO Mark Zuckerberg.
Shareholder James Kacouris has filed a lawsuit in New York court, accusing Facebook, Zuckerberg and chief financial officer David Wehner of misleading communications about slowing revenue growth, declining operating margins and active users.
In many respects they are similar - the fall in revenues and the growth of active users - the collapses of the two giants and for the shareholders the troubles are similar. Both of the two social networks are afflicted – according to many observers – by data manipulation, accounts managed by robots and by the unease generated by the growing influence of social media on culture and society. Twitter CEO Jack Dorsey said - to explain the drop in active users - that his priority is to reduce abusive conversations on the platform and the group specified that its algorithms have identified over 9 million potential spam accounts or robots per week.
The leadership of the two giants is also under accusation and Mark Zuckerberg, absolute head of Facebook thanks to a share class structure that allows him to maintain control even if he sells millions of shares, is increasingly under accusation. Too much power concentrated in one hand, that's the charge. A system that was tolerated as long as the trend was positive but which now risks paying the price for growing discontent. The initiation of cases in court could be a signal that should not be underestimated.
