Facebook stock recently suffered the biggest single day blow it has seen since the company went public. Wednesday the company was valued at approx $630 Billion. After the market closed Thursday this dropped to $510 billion.
This decline was felt on high. Mark Zuckerberg, due to his personally owned stock (a little over 16%), suffered a loss of $15.4 Billion. That was out of the total loss of $120 Billion.
This 20% drop is attributed to its recent earnings report that showcased that earnings were well below expectations and that the company would be experiencing slowed growth for quite a few years to come.
In addition, the drop of the social media giant’s stock led to a sharp decline in some of Facebook’s competitors. Twitter and Snapchat both experienced a sharp stock decline. Twitter rebounded for the most part closing only 0.2% down, although the pain was still felt by Snapchat with their almost 3% decline.
It wasn’t the lower profits that drove the drop, but rather the part regarding slower growth. Facebook swung back regarding the slowed growth quoting an increase in expenses of up to 10%, the flat growth in the US and Canada, and the decline is Europe being blamed on the EU. The EU had recently implemented the General Data Protection Regulation that Facebook attributed the losses across the pond to.
This is the second major blow to stock value Facebook has faced. Back in March, the company experienced similar losses losing 18% of its stock value amid the Cambridge Analytica fiasco regarding the third party collection and misuse of users data for political aims. That loss took place over the course of two weeks, and the company recovered and even reached new heights in its stock value. This loss was from a single day, and it doesn’t look like it will be recovering any time soon.
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