Share prices of social media giant Facebook dropped by a further 1 percent on Monday, extending the decline of 8.3 percent on Friday after more companies and brands joined the global ad boycott. Analysts predict that the stock may drop further as new batches of companies pull their advertising from Facebook's platform to force it to implement stricter measures to control the spread of hate speech.
The decline experienced on Friday and Monday resulted in a combined loss of over $60 billion in the company's market value. Major brands such as Starbucks, PepsiCo, and Coca-Cola have recently joined the dozens of other companies that have pledged to halt their advertising campaign on the social media platform. Facebook also lost one of its largest advertisers, Unilever, which announced that it would temporarily be pulling its ads on the platform.
Executives from the companies that have joined the campaign have all released their own take on the issue, with some calling on Facebook to take immediate action or face a permanent removal of their ads. Facebook has so far responded to the call, with its founder, Mark Zuckerberg, revealing new measures to curb hate speech and misinformation on its platform.
Zuckerberg noted that the company is now expanding its efforts to properly label election-related ads and post to lead viewers to more accurate information. The company also laid out plans to expand its definition of prohibited hate speech, which will soon include any post or ads that directly attack or discriminate against another demographic.
Some companies and civil rights groups have claimed that Facebook's efforts are insufficient to curb the continued spread of hate speech and fake news on its platform. Groups such as the Anti-Defamation League, the Color of Change, and the NAACP claim that these types of posts and ads are still present on Facebook despite the company's promises to change its policies.
Analysts at BMO Capital Markets have noted that while major brands have temporarily pulled their advertising on the platform, the campaign is likely to have little effect on the company's total ad revenues in the short-term. Facebook currently has more than 8 million advertisers, generate hundreds of millions of dollars in revenues for the company each month. Losing a few hundred advertisers is expected to have little damage to its overall business.
However, user and investor sentiment towards its operations is an entirely different matter. The drop in its share prices is a clear example of how much the company could stand to lose if investors lose confidence in its ability to secure its own platform.