NEW YORK (Reuters) - The biggest stock-picking fund at BlackRock Inc raised its bet on Facebook Inc in March, a source familiar with the matter said, making the social media company a top 10 equity holding and apparently betting that Facebook’s privacy scandal will not weigh on the stock for long.

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A person familiar with the matter said the Global Allocation Fund - run by Dan Chamby, Russ Koesterich, David Clayton and Kent Hogshire - had boosted its Facebook share count. The person, who requested anonymity because BlackRock does not discuss individual stocks, declined to say specifically how many Facebook shares the fund had acquired or when during the month they were purchased.

Facebook and BlackRock, the world’s largest asset manager with $6.32 trillion under management, declined to comment.

The increases in Facebook holdings were enough to make the social media company the $36.7 billion fund’s sixth largest stock holding at March 30, up 10 spots from where it had been two months earlier, according to the fund’s website and Thomson Reuters data. The March disclosures also do not spell out when shares were acquired or how many were bought.

Facebook had not recently been listed in the top 10 holdings, a list updated monthly. As of Jan. 31, the date of its most recent detailed filings, the Global Allocation Fund held 1.38 million Facebook shares, making it the No. 16 equity holding valued at about $258 million at that time.

Facebook shares are down more than 10 percent after the New York Times and London’s Observer newspaper reported in mid-March that Cambridge Analytica, a political consultancy that worked on U.S. President Donald Trump’s campaign, gained inappropriate access to data on tens of millions of the social media company’s users.

Even with the increased stake, which has not been previously reported, Facebook accounts for less than 1 percent of the BlackRock Global Allocation Fund, which holds hundreds of stocks and also invests in bonds as well as gold and other commodities. Apple Inc is listed as the fund’s top stock holding, accounting for 2.24 percent of assets at the end of March.

Yet the buying represents an endorsement of Facebook by a major outside shareholder at a time when the company faces questions about whether its targeted advertising business can survive stricter regulation and calls for users to “#DeleteFacebook.”

Facebook Chief Executive Mark Zuckerberg said in testimony to U.S. lawmakers last week that the company’s major investments in security “will significantly impact our profitability going forward.”

Overall, Facebook shares are down more than 6 percent year-to-date. Short-sellers, who warned the market was overvalued and have been raising alarm about social media privacy issues, made $4 billion on paper profits in the last two weeks of March, betting against the “FANG” group. They comprise four closely watched internet stocks: Facebook, Amazon.com Inc, Netflix Inc and Alphabet Inc’s Google.

Facebook is the seventh largest U.S. equity short at $5.22 billion with short interest increasing by $447 million in April and $1.11 billion for the year, according to S3 Partners.

Still, for other investors, the Cambridge Analytica news created an opportunity to buy a company with one of fastest-growing revenue lines in the S&P 500 at a discount.

The stock is still near its cheapest ever, according to a price-to-earnings ratio based on profits Wall Street analysts expect Facebook to deliver over the coming 12 months.

For BlackRock, scooping up battered shares of Facebook could turn out to be a lucrative bet that could help boost its fund. Relatively low-fee shares of the Global Allocation Fund are down 0.05 percent this year, through Friday, beating most its peers. Overall, the fund is on course the post its fourth straight year of withdrawals, according to Thomson Reuters’ Lipper research unit.