Six Stocks Rocked by Scandal: Sell, Hold or Buy?

Plenty of worries can keep investors up at night, from the prospects for corporate earnings to whatever the Federal Reserve Board might have up its sleeve. Lately, a number of investors have learned that when a stock they own becomes mired in scandal and controversy, the worries hit closer to home, and the consequences can be dramatic. Roughly $90 billion in market value of Facebook shares went up in smoke in the wake of the social network's privacy scandal in March, although the stock has mostly recovered. And billions in market value have disappeared from the stock of credit-reporting firm Equifax since the disclosure of a data breach that affected millions of consumers in 2017.

It's precisely at these moments that investors must make crucial decisions. Buying into an essentially good company when it's down might turn out to be a once-in-a-lifetime opportunity. But sticking with a stock that deserves to be jettisoned could be a portfolio-burning mistake. Although your analysis of a stock embroiled in scandal may incorporate political, ethical or other considerations, ours is based solely on the prospects for the companies and their shares.