Facebook Suffers Huge One-Day Drop in Market Value

Facebook Suffers Huge One-Day Drop in Market Value

Facebook Suffers Huge One-Day Drop in Market Value

Facebook has had a tough few days, seeing a massive decline in its stock price which fell by as much as 23 percent in after-market trading on Wednesday. "In the USA and Canada, Facebook's daily active users remained flat, sequentially, at 185 million, while the number actually fell in Europe, falling to 279 million - down from 282 million".

Mark Zuckerberg, the chairman and chief executive of Facebook, lost more wealth in a single day than the entire market value of Molson Coors Brewing Co, or Nasdaq or Ralph Lauren Corp. Combine this pessimistic outlook with 1.54% user growth and 1.44% daily active users which are half of last quarter's growth percentage and we're looking at a company that is getting squeezed at both ends. Though Facebook-specific global DAU rates were up 11 percent year over year - with growth led through users in India, Indonesia and the Philippines - it was less than Wall Street was projecting.

Wall Street didn't take too kindly to that: Facebook's stock price dropped almost 20 percent in after-hours trading.

"A CEO who also serves as chair can exert excessive influence on the board and its agenda, weakening the board's oversight of management", the proposal says, according to the Business Insider.

Facebook said 2.5 billion people were using any of its family of apps each month, including Instagram and WhatsApp.

Ben Bajarin, an analyst at Creative Strategies, calls this "new territory" for Facebook.

That could be down to the drop being a one-off, potentially following the Cambridge Analytica data sharing scandal, or even the sharing of private posts belonging to some 14 million Facebook users, rather than a downward spiral for Facebook. However, average revenue per user in the region rose despite the lack of growth.

The company's revenue and subscriber growth missed Wall Street's expectations, and then company officials warned of slowing growth ahead.

The company also said that revenue growth from emerging markets and the company's Instagram app, which has been less affected by privacy concerns, would not be enough to fix the damage.

Facebook has faced dozens of lawsuits over its handling of user data in a scandal also concerning the United Kingdom firm Cambridge Analytica. BMO Capital raised its expectation to $2,250 per share from $2,000.

Facebook has said it will increase spending to make investments in video content, and on new bets like artificial intelligence and virtual reality. The company is also rapidly expanding its real estate around the world to accommodate a hiring spree, which includes thousands of new workers to help combat foreign election manipulation on the site. Facebook Class B shares have 10 times the voting power of Class A shares, and Zuckerberg owns 75 percent of the Class B stocks.

Assuming 484 million shares outstanding, as indicated in Amazon's second-quarter financial statements, this would put the company's market capitalization at $1.06 trillion.

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