Will Danoff, portfolio manager of Fidelity Contrafund, Facebook's second-largest investor, gave the social media company a rare vote of confidence by breaking with tradition and resolving to publicly comment on one of the fund's holdings. In a Monday email to Reuters, Mr. Danoff praised Chief Executive Officer Mark Zuckerberg for his efforts to withstand repeated grillings from lawmakers the world over, most of which were aimed at the aftermath of the Cambridge Analytica scandal which emerged in late March. Facebook addressed regulatory concerns in a thorough manner and introduced "a comprehensive plan to uphold the trustworthiness of its digital communities," Mr. Danoff said.
The move is significant because the 58-year-old — responsible for the world's largest stock or bond mutual fund valued at $108 billion — rarely comments on Contrafund's holdings, which is a standard practice among venture capitalists, especially in the context of publicly traded companies. His vote of confidence is likely to be welcomed by Mr. Zuckerberg who's now facing rare but vocal calls for his resignation for the first time in his career. While Facebook's stock entirely recovered from the Cambridge Analytica scandal in a matter of months, it didn't fare as well following the publication of its second-quarter financials which revealed slowing user and revenue growth, as well as worrying performance projections from the firm's management. As a result, Facebook went through its worst trading day in six years last month and is still tied by the aftermath of that report.
Moving forward, the company is now both facing pressure to become more transparent in regards to how it approaches user privacy and in the context of its efforts to combat misinformation campaigns that have become widespread over the last several years, seeking to manipulate the global public for political reasons and profit. With the U.S. mid-terms now fast approaching, the social media juggernaut is likely to be placed under additional scrutiny in its home country. Across the pond, the European Union already signaled it may explore the idea of breaking up Facebook in the future, with some European Commission members publicly stating they're starting to think of the firm as a monopoly across a number of segments.