Sheryl Sandberg should replace Mark Zuckerberg at Facebook: Calacanis

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Mark Zuckerberg, chief executive officer of Facebook Inc., left, and Sheryl Sandberg, chief operating officer of Facebook Inc.

On Monday, Facebook said it has hired a firm to conduct a “comprehensive audit” of Cambridge Analytica and the whistleblower, Christopher Wylie, who set off the firestorm. It suspended Cambridge Analytica from the site late Friday night.

Meanwhile, Cambridge Analytica has denied violating Facebook’s terms of service and said Wylie is misrepresenting himself and the company.

Facebook closed down almost 7 percent on Monday, dragging tech stocks down with it.

Calacanis said the company has moved from an existential crisis to an actual crisis, calling it a “big deal.”

While he doesn’t foresee any user backlash right now, he said, there are other issues at stake, such as the ability to buy companies and to attract top talent.

Facebook did not immediately respond to a request for comment on Calacanis’ remarks.

— CNBC’s Sara Salinas contributed to this report.