Facebook confirmed that Chief Operating Officer Sheryl Sandberg asked employees to review whether George Soros had made a bet against the company’s stock after the billionaire argued at an elite financial gathering in Switzerland that the social media giant and rivals were exploiting users.
Research into Soros’s investments and stock trades related to Facebook was already under way “when Sheryl sent an email asking if Mr. Soros had shorted Facebook’s stock,” a spokesperson for the Menlo Park, Calif.-based company said in a statement.
Shorting a stock lets investors sell borrowed shares at a high price, then buy them back at a lower price before returning them to the lenders and pocketing the difference. Essentially, short-sellers profit from a stock’s decline, a practice that bankers blamed for plummeting valuations of their companies at the height of the 2008 financial crisis.
Facebook has been under scrutiny for much of the year over breaches of private user data, claims that it has downplayed or blocked conservative commentators and questions over whether it and rival Google are engaging in antitrust behavior, a criticism leveled by Soros at the World Economic Forum in Davos in January.
Earlier this month, the New York Times reported that Facebook had engaged Definers Public Affairs, a D.C. public relations firm with conservative ties that shared information about the Jewish billionaire’s funding of advocacy groups including Freedom from Facebook that criticized the company. The newspaper first reported on Thursday that Sandberg had asked about Soros shorting Facebook’s stock after his vehemently critical speech.
“Social media companies deceive their users by manipulating their attention and directing it towards their own commercial purposes,” Soros said at the time.
The companies’ growth depends on attracting users with a convenient platform on which to share information, and then using that data to charge advertisers high rates for reaching a lucrative market known to be interested in their products.
“Social media companies are inducing people to give up their autonomy,” Soros said, and once they lose the ability to think for themselves, they may have difficulty regaining it.
“This may have far-reaching political consequences,” the Democratic Party donor continued. “People without the freedom of mind can be easily manipulated. This danger does not loom only in the future: It already played an important role in the 2016 U.S. presidential elections.”
Indeed, U.S. intelligence agencies have said that the Russian government used social media platforms like Facebook to influence and inflame voters in that race, in which President Trump won an unexpected victory against Hillary Clinton.
U.S. internet giants like Facebook “have neither the will nor the inclination to protect society against the consequences of their actions,” Soros added. “That turns them into a menace, and it falls to the regulatory authorities to protect society against them. In the U.S., the regulators are not strong enough to stand up against their political influence.”
While Sandberg originally said in an interview with CBS that she did not know about the relationship Facebook had with Definers, the company later said that some Definers’ work did come across her desk.
Facebook also conceded that Definers urged reporters to examine funding of Freedom from Facebook, which has urged U.S. regulators to break the social media giant. The goal was to show the group wasn’t a grass-roots campaign but was funded by “a well-known critic of our company,” Facebook said.
Freedom from Facebook’s director, Sarah Miller, said Friday that the social media firm should “immediately release any and all documents and emails relating to Definers and their research” on her organization.
It’s up to Facebook, she added, to prove that none of its data was “improperly accessed as part of this effort to turn up dirt on nonprofit leaders advocating on behalf of the public interest.”
Definers, for its part, has denied that it did any opposition research for Facebook, saying its work consisted of standard media monitoring and public relations efforts. Mark Zuckerberg, Facebook’s founder and chief executive officer, said he ended the relationship in mid-November shortly after learning about it from the Times article.
“This type of firm might be normal in Washington but it’s not the kind of thing that I want Facebook associated with,” he told reporters.
Sandberg herself never directed any research on Freedom from Facebook, but she “takes full responsibility for any activity that happened on her watch,” the social media company said Thursday night. Despite news media questions about Sandberg’s role in Facebook’s work with Definers, Zuckerberg has stood by her.
“Sheryl is doing great work for the company,” he told reporters after the initial Times report. “She’s been a very important partner to me and continues to be, and will continue to be.”
Facebook climbed 1.4 percent to $140.61 at the close of New York trading on Friday and has gained 6.7 percent this week.
[Also read: Facebook exempts news media from political ad transparency tool]
