Instagramers Put Down Their Phones for Five Seconds on Christmas, the Web Goes Crazy

A supposed drop in users led to Facebook stock price dropping 3 percent

By Lucian Parfeni on December 28th, 2012 22:21 GMT

It's been a couple of slow news days for the past few days, as you can imagine, so stuff that would normally fly under the radar or would get very little coverage, gets blown out of proportion. Case in point is Instagram supposedly losing users after the privacy policy kerfuffle.

Based on AppData info, which is unofficial, it seemed that Instagram dropped some users over the past week or so. With the privacy policy issue fresh in everyone's mind, linking the two was easy.

This is the problem with people not used to analyzing data, they don't know what they're seeing. A drop in Instagram users does not imply a link to the policy issue, correlation does not equal causation.

There may be connection, but you can't prove it by looking at raw numbers alone. A much more reasonable explanation was that, heaven forbid, some people actually stopped using Instagram or their phones entirely for a few days over Christmas.

In fact, data for other apps showed a very similar trend. But a story about people not using Instagram and enjoying their time with the family isn't as spectacular as one where user outrage leads to a massive drop in usage.

This alone wouldn't be much of a problem, but Facebook stock price actually dropped three percent as a result, since slow news days apply to the likes of Bloomberg or the Wall Street Journal, which picked up on the story.

Stock price has recovered since then, but it once again shows how impressionable "investors" really are. It's clear that some people actually lost money as a result of the story. While you could argue that it's their fault for being so gullible, it's not only that.

Facebook has been cursed with really fickle investors it seems as the slightest irritation sends stock prices down or, rarer, up.
Instagram rumor sends Facebook shares down
   Instagram rumor sends Facebook shares down
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