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

Facebook whistleblower Frances Haugen joins 'Influencers with Andy Serwer' to discuss the reasons behind Meta's Wall Street troubles.

Video Transcript

- There are a lot of investors watching this, Frances. And I'm curious, are you an investor? Would you-- do you own these stocks? Would you buy these stocks? Would you short these stocks? Would you short Meta Facebook? Can you?

FRANCES HAUGEN: So I'm a large holder of Facebook stock because I can't sell it.

- Why can't you sell it?

- Because I'm an insider. Right, right.

- That's kind of a bummer then, right?

- Well, I have experienced the stock slide. I have felt the pain along with everyone else.

- Well, this is interesting because when they came out with earnings the other day, you tweeted out that the company, the stock decline resulted from the company lying about material issues. So you're actually tweeting against your own holding then I guess, in a sense.

- You know I think people, I think unless Facebook changes a lot of people are going to die. And the reality is a lot of people do get wiped out by the stock slide. Like a lot of people sent me memes, very funny memes of, like, there's an amazing graphic right now of do you remember Mark Zuckerberg riding the hydrofoil? Right, he has the American flag, right, he's riding hydrofoil. It's a classic internet object. Someone had juxtaposed just that and the stock going down. Like him surfing the stock going down.

And a bunch of people like message them all to me. They're like, oh you should tweet this out. And the reality is, like, as a shareholder, you know, when Facebook misleads people about the value of the company and when you lie about material issues, you are lying about the value of the company. That's the core of our SEC complaint.

People get hurt, right. People's retirements get wiped out. You know, people have written to me and said, I have friends who had, this is not good investment advice, they had 50% of their holdings, they had 60% of their holdings, 70% of their holdings in Facebook because no one thought Facebook was going to go down. Like, I looked at the cost of puts right before it happened and no one thought Facebook was going to go down a week before it did. Like we're talking it was pennies for puts that were 10% less than the value of Facebook.

I love studying options markets because it's like the collective intelligence of the world, right. I'm a data scientist so I love these things. And you know, people got deeply hurt by the stock slide. And we forget that. We forget the emotional side and we forget that it's real people's lives.