Facebook Inc.'s (Nasdaq: FB) stock tumbled 21% in March when revelations surfaced that political analytics firm Cambridge Analytica, which helped guide President Donald Trump's 2016 presidential campaign, paid for data on 87 million Facebook users without their consent.
But after a strong showing by founder and CEO Mark Zuckerberg in front of Congress to address selling of users' data in breach of a 2012 consent decree, Facebook's stock ran right back up to make new all-time highs at $203.55.
Now, in a 747-page document released to Congress last Friday, Facebook admitted giving dozens of companies special access to user data after telling Congress it restricted personal information to outsiders in 2015.
Here's what Facebook's reveal could mean for the stock… and one trade that'll let you rake in mega-gains as a result…
Facebook's Lying Hasn't Hurt Its Stock, Yet
After Zuckerberg's April testimony before Congress, Facebook followed up in June with 450 pages of answers to outstanding questions asked by Senate and House committees.
The latest, more-expansive set of answers delivered to the Energy and Commerce Committee of the U.S. House of Representatives, in response to questions from April, was received shortly before midnight Friday, according to the committee's website – hours after the close of business Friday, the official deadline for submission.
The new document disclosures follow a Wall Street Journal article in June that reported Facebook struck customized data-sharing deals that gave select companies, such as Nissan Motor Co. Ltd., access to user records for their apps well after the point in 2015 when it said it walled off that information. Nissan is listed in Friday's document.
Almost all the data deals revealed in Friday submission contrast Zuckerberg's and Facebook's former statements that the company restricted personal information to outsiders in 2015.
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According to WSJ, the "special deals were required to give app developers time to become compliant with changes in its policies, and to enable device and software makers to create versions of the social network for their products."
Facebook was sharing information about users' friends – including name, gender, birth date, hometown, photos, and page likes – with 61 app developers six months after it said it stopped access to such data.
In the hearings, lawmakers asked Zuckerberg if Facebook was ever in violation of a settlement made in 2012 with the Federal Trade Commission, which required the company to give users "clear and prominent notice" and obtain their "express consent" before sharing their information beyond their privacy settings.
Facebook says it hasn't violated the FTC pact.
However, Mark Zuckerberg admitted Facebook hasn't been able to reconstruct what happened to users' data. The company said, "It is possible we have not been able to identify some extensions."
Profit from Facebook's Fall (Without Shorting)
About the Author
Shah Gilani boasts a financial pedigree unlike any other. He ran his first hedge fund in 1982 from his seat on the floor of the Chicago Board Options Exchange. When options on the Standard & Poor's 100 began trading on March 11, 1983, Shah worked in "the pit" as a market maker.
He helped develop what has become known as the Volatility Index (VIX) - to this day one of the most widely used indicators worldwide. After leaving Chicago to run the futures and options division of the British banking giant Lloyd's TSB, Shah moved up to Roosevelt & Cross Inc., an old-line New York boutique firm. There he originated and ran a packaged fixed-income trading desk and established that company's "listed" and OTC trading desks.
Shah founded a second hedge fund in 1999, which he ran until 2003.
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Shah is a frequent guest on CNBC, Forbes, and MarketWatch, and you can catch him every week on FOX Business' "Varney & Co."