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Whistleblower Frances Haugen: Meta’s stock plummeted because it lied about ‘value of the company’

·3 min read

Meta (FB) CEO Mark Zuckerberg on Tuesday unveiled new plans for the company's turn toward the metaverse, introducing company values like "live in the future" and telling employees they'll be referred to as "metamates."

Shares of Meta ticked up slightly on the day but the company's stock remains about 31% below where it stood upon the release of disappointing earnings at the outset of the month.

Observers on Wall Street and in Silicon Valley have attributed the sudden collapse to sluggish user growth, the uncertain bet on the metaverse, and new Apple (AAPL) privacy settings that limit the effectiveness of targeted ads.

Whistleblower Frances Haugen, however, tells Yahoo Finance in a new interview that the stock decline owes to a deeper central reason: lies she says the company told about its products.

Haugen, a former Meta product manager who left the company last year and leaked thousands of internal documents, said the collapse in the value of the shares exemplifies the way inaccurate public statements from the company — which Haugen refers to by its former name "Facebook" — have hurt everyday investors.

"When Facebook misleads people about the value of the company — and when you lie about material issues, you're lying about the value of the company," she says. "People get hurt."

"People's retirements get wiped out," she adds. "People got deeply hurt by this stuff."

"We forget the emotional side, and we forget that it's real people's lives," she says.

In October, Haugen filed a whistleblower complaint with the Securities and Exchange Commission that accused the company of misleading investors with public statements that contradicted its internal research.

Former Facebook employee and critic Frances Haugen answers questions during a U.S. House Committee on Energy and Commerce Subcommittee on Communications and Technology hearing on Capitol Hill in Washington, U.S., December 1, 2021. REUTERS/Elizabeth Frantz
Former Facebook employee and critic Frances Haugen answers questions during a U.S. House Committee on Energy and Commerce Subcommittee on Communications and Technology hearing on Capitol Hill in Washington, U.S., December 1, 2021. REUTERS/Elizabeth Frantz

A trove of documents from Haugen led to a series of bombshell reports, known as the "Facebook Files," which revealed the company's internal knowledge of issues as disparate as the effect of Instagram on the mental health of young girls, the prevalence of anti-vaccine misinformation in comments on Facebook posts, and the use of Facebook for the trafficking of vulnerable domestic workers.

Meta did not immediately respond to request for comment on the recent remarks from Haugen. In response to the initial leaks, in October, Zuckerberg said in a Facebook post: "We care deeply about issues like safety, well-being and mental health. It's difficult to see coverage that misrepresents our work and our motives. At the most basic level, I think most of us just don't recognize the false picture of the company that is being painted."

Speaking to Yahoo Finance, Haugen accused the company of eluding accountability by dismissing the concerns of users and critics.

"Facebook knows that no matter what activists bring forward, they can just deny that it exists," she says.

After the release of the "Facebook Files" last fall, critics contacted Haugen about having raised similar issues with the company, she said.

"One of the things that happened over and over again, after I came out, was activists would reach out to me and say, 'I brought this up five years ago,'" Haugen said.

"[Meta] always tells me, this is just anecdotal. It's not a real trend. It's not actually a problem. But the documents showed they knew it was a big problem."

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