Facebook shares hit near 20-month low as Sandberg defends its reputation

Shares in social media giant Facebook dropped to their lowest point in 19 months last night, as its operations chief Sheryl Sandberg stepped in to defend the company's position on fake news and Russian interference.

In an interview with CBS, Sandberg denied claims from a New York Times investigation that Facebook hired a Republican opposition research group called Definers to deflect attention away from the company by publishing critical stories about rival firms.

"We absolutely did not pay anyone to create fake news – that they have assured me was not happening. And again, we're doing a thorough look into what happened but they have assured me that we were not paying anyone to either write or promote anything that was false. And that's very important," Sandberg said.

Sandberg wrote in a Facebook post on Thursday that she did not know the firm had hired Deniers until after the New York Times investigation was published, despite leading the company's operations. She clarified yesterday that Deniers was hired by Facebook's communications team.

Facebook shares dropped more than four per cent during trading yesterday, taking its share price a low of $137.77. It closed late last night at $139.53.

US senators called on Facebook founder and chief executive Mark Zuckerberg to also respond to the New York Times' allegations yesterday, which included attempts by Facebook to downplay Russian interference in the 2016 Presidential election, and to discredit activist investors such as billionaire George Soros.

"We are gravely concerned by recent reports indicating that your company used contractors to retaliate against or spread intentionally inflammatory information about your critics," wrote the senators in a letter to Zuckerberg.

"Both elected officials and the general public have rightfully questioned whether Facebook is capable of regulating its own conduct."