Facebook (FB) Stock Sinks as Revenue Misses Expectations

Mark Zuckerberg the real face of Facebook

"The implementation of GDPR gave a large number of Facebook users control over their privacy, and it should have been patently obvious to investors (and to us) that allowing users control would result in slightly lower engagement", he noted, alluding to Europe's General Data Protection Regulation privacy rule.

CEO Mark Zuckerberg accounted for the majority of this sell-off, parting with $3.5bn worth of shares according to Bloomberg. Facebook's stock price now stands at $176.26, having dropped by a massive 18.9% from the $217.50 value that it stood at before the company's earnings call.

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

The $15.8bn in net worth that Zuckerberg stands to lose in the move is equal to the wealth of the world's 81st-richest person, now Japanese businessman Takemitsu Takizaki, according to Forbes real time data. Facebook's market cap was $629 billion at market close Wednesday, and ended the day Thursday at around $510 billion.

Facebook shares dived almost 20% as markets opened after the social media giant warned it expects weaker growth. Chief Financial Officer David Wehner said he expects the decline to register "high-single-digit percentages" for both the third and fourth quarters.

The plunge came one day after the firm missed revenue forecasts for the second quarter and warned that growth would be far weaker than previously estimated.

"Given this more cautious outlook, we are lowering our estimates and reducing our price target to $205 from $225", Monness Crespi Hardt Analyst Brian White announced Thursday in an investor note, according to Fox News.

Facebook's stock dropped by a whopping 24% after it announced its second-quarter financial results on Wednesday.




It was also noted that under the circumstances, the numbers for Facebook could be much worse.

The company said profit was up 31 percent in the second quarter at $5.1 billion as revenues rose 42 percent to $13.2 billion.

Shares in other technology companies were dragged down by the social media giant, as the technology sector fell 1.9%.

Facebook shares fell another 0.8 percent on Friday, closing at $174.89 on the Nasdaq.

Facebook used to be made out of corporate Teflon.

Some investors were also dismayed with Facebook's revelation about Instagram Stories, which allow users to post videos or photos that disappear after a day.

Now we have real-life advertising from Facebook saying it's concerned, and looking after our privacy. MarketWatch reports the decline, which erased about $120 billion United States dollars in market value, is both the largest single-day percentage drop ever and the largest market value loss in a single day, as well.

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