The 19 percent decline of Facebook shares that took place yesterday was the largest one-day drop in the history of the American stock market, wiping out USD 120 billion from its market cap. In the after-hours trading Facebook shares continued the fall to a 23 percent total.
Most probably the share price will rebound today, a move already seen in the pre-market quotation where the price went up almost 3 percent. But yesterday’s fall remains a huge alarm signal for mark Zuckerberg and the other executives that investors are not happy to see a weak growth forecast.
Facebook reported its second quarter earnings and showed an increase of 42 percent for revenues, but it still missed analysts’ projections. But for the rest of the year, the company’s chief financial officer warned that the revenue growth would be in single digit percentages.
The social-media platform has faced a series of crisis in the past two years, starting with Russian interference in the 2019 US election and continuing with this year’s Cambridge Analytica data privacy scandal.
Facebook’s USD 120 billion drop is bigger than the USD 91 billion that Intel has lost in September 2000 during the dot-com bust. Microsoft also lost USD 77 billion in a day during the same crisis.
Facebook has a market cap of USD 510 billion.
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