$168 billion lost in a day: Facebook's plunge could rewrite history

$168 billion lost in a day: Facebook's plunge could rewrite history

$168 billion lost in a day: Facebook's plunge could rewrite history

The huge fall came after Facebook published its earnings report for the second quarter of 2018, which revealed the company is growing at a slower rate than predicted.

According to Facebook CEO Mark Zuckerberg, the implementation of the EU's General Data Protection Regulation (GDPR) is to be blamed.

Facebook Inc.'s scandals are finally hitting the company where it hurts: growth.

The news sent Facebook's stock free-falling almost 25 percent in after-hours trading.

Ben Bajarin, an analyst at Creative Strategies, calls this "new territory" for Facebook. The company also reported a second-quarter profit of $2.5 billion (roughly Rs. 17,100 crores), its largest ever. The last time the company missed revenue estimates was the first quarter of 2015. Investors could be waiting to see if the stock has bottomed or if more bombshells, such as the proposal to remove Zuckerberg as chairman, are still unexploded.

Still, investors weren't prepared for numerous bombshells dropped by Facebook Chief Financial Officer David Wehner. "Facebook's Chief Financial Officer warned that revenue growth would "decline by high single-digit percentages" until 2019".

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Those mixed messages from analysts might be causing some hesitation, but a 20% discount on Facebook stock is likely to be too tempting a gamble for bargain hunters eventually. Within minutes it was down 15%, then 18%, then 24%.

On Thursday afternoon, Facebook watched its capitalization drop by $119 billion, lowering its valuation to $510 billion, which represents a 19 percent drop, according to CNBC.

The Trillium Assets proposal charged that the lack of an independent board chair and oversight contributed to Facebook "missing, or mishandling, a number of severe controversies", including the social media site being used for the Russian meddling in US elections, the sharing personal data of 87 million users with Cambridge Analytica, proliferation of fake news and others, the Business Insider said. In other words, there is practically nobody left to get on the platform. A Facebook spokesman declined to comment. The company doesn't make as much money from Stories as it does from its News Feed and other features on its site. Analysts expect the firm to invest more in these services, as it is obliged to increase security costs for its original platform.

As analysts pounded Facebook executives on the call about the company's expected deterioration in its financial results, its stock continued to sink.

Wehner gave three different reasons why the company's revenue growth would decline: currency headwinds, greater investments in new kinds of content-sharing, like disappearing videos, and greater user control over privacy - a direct response to criticism the company has fielded.

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