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$10 billion added to Facebook’s company value after $5 billion fine

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mark zuckerberg
Yesterday’s big story was the FTC hitting Facebook with a record $5 billion fine following countless private information handling scandals. But markets appeared happy with the fine, sending the market-cap of Facebook up by more than $10 billion, completely negating the punitive action.

Techspot revealed yesterday that a $5 billion fine was levied on Facebook by the Federal Trade Commission (FTC) as a penalty for a string of violations, scandals and disputes.

A $5 billion fine would be enormous in almost any other sense–not only as a punitive measure, but also in signaling how badly the company in question had behaved. But Facebook’s $5 billion is little more than a slap on the wrist, considering its size, reach, and value. So much so that the stock price of the social media giant grew by 1.81 percent following news of the FTC’s ruling, adding $10.4 billion to their business valuation.

facebook stocks
Markets have rewarded Facebook for so lightly getting off, covering the fine’s price and adding another $5 billion to the coffers of the company.

In this attempt to keep such a mammoth business to account, many were fast to point out the flaw. Elizabeth Warren, Senator and Democratic Presidential candidate, called it a “bucket punishment drop,” tweeting our renewed calls for Facebook to be broken down.

There’s no question that $5 billion is a lot of money, but given that last year Facebook made a profit of $22 billion and last quarter another revenue of $15 billion, many people think the punishment doesn’t suit the crime.

Elizabeth warren
It should be said that the choice of the FTC was not just monetary. The Washington Post reports that Facebook “may have to document every decision it makes about data before offering new products, keep closer watch over third-party apps that tap users’ information, and require its top executives, including CEO Mark Zuckerberg, to attest that the company adequately has protected privacy.”

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