Facebook braces for biggest one-day wipeout in US stock market history


Facebook is bracing for its worst day in six years as a public company and the biggest one-day wipeout in US stock market history on Thursday as shares plunged as much as 20 percent after months of scandal.

Mark Zuckerberg’s fortune is also set to take a $16 billion hit as shares in his social media company plunged 20.4 percent at $173.20 in premarket trading.

The sharp decline eradicated about $128 billion off the company’s value – or nearly four times the entire market capitalization of Twitter Inc.

Investors hammered shares in the social media giant after it reported slower revenue growth in the second quarter a day earlier.  

Facebook is bracing for its worst day in six years as a public company and the biggest one-day wipeout in US stock market history on Thursday as shares plunged in premarket trading

Facebook is bracing for its worst day in six years as a public company and the biggest one-day wipeout in US stock market history on Thursday as shares plunged in premarket trading

Facebook is bracing for its worst day in six years as a public company and the biggest one-day wipeout in US stock market history on Thursday as shares plunged in premarket trading

The social media giant’s financial results, released late on Wednesday, fell short of Wall Street expectations as the company continues to grapple with privacy issues.

Facebook’s second-quarter results were the first sign that new European privacy laws and a string of privacy scandals involving Cambridge Analytica and other app developers are hitting the company’s business.

The $16.4 billion in net worth that Zuckerberg stands to lose would alone be enough to get a rank of the 80th-richest person in the world, a position currently held by real-estate developer Donald Bren with a net worth of $16.3 billion, according to Forbes. 

Describing the announcements as ‘bombshells’, Baird analysts said the issues were to a large degree ‘self-inflicted’ as Facebook sacrifices its core app monetization to drive usage.

Of 47 analysts covering Facebook, 43 rate the stock as ‘buy’, two rate it ‘hold’ and two rate it ‘sell’. Their median target price is $219.30.

Facebook executives made investors nervous on Wednesday in a call with analysts when they said profit margins would plummet for several years due to the costs of improving privacy safeguards and slowing usage in its biggest advertising markets.

The plunging share prices follows months of criticism leveled against the social media giant over its handling of several recent scandals, including the Cambridge Analytica data saga and Russian meddling in the US election.

The Cambridge Analytica scandal prompted several apologies from Zuckerberg and generated calls for users to desert Facebook, which has grown strongly since launching as a public company in 2012.

Facebook’s monthly active user count was 2.23 billion, slightly behind the 2.25 billion forecast by analysts. Users in Europe dropped from 377 million to 376 million, partly as a result of the new General Data Protection Regulation (GDPR) rules.  

Ahead of the announcement, industry experts had predicted that the number of active users visiting the social network would either drop or flat line.

Mark Zuckerberg's fortune is also set to take a $16 billion hit as shares in his social media company plunged 20.4 percent at $173.20 in premarket trading 

Mark Zuckerberg's fortune is also set to take a $16 billion hit as shares in his social media company plunged 20.4 percent at $173.20 in premarket trading 

Mark Zuckerberg’s fortune is also set to take a $16 billion hit as shares in his social media company plunged 20.4 percent at $173.20 in premarket trading 

The Facebook CEO saw his net worth tumble by $18.8billion in after-hours trading on Wednesday, a record-drop that took him down four spots in Forbes' World Billionaires List

The Facebook CEO saw his net worth tumble by $18.8billion in after-hours trading on Wednesday, a record-drop that took him down four spots in Forbes' World Billionaires List

The Facebook CEO saw his net worth tumble by $18.8billion in after-hours trading on Wednesday, a record-drop that took him down four spots in Forbes’ World Billionaires List

 

 

 



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