Facebook Loses About $120 Billion in Value in Single Day as Stock Collapses
The drop in the price of the stock cost Facebook founder, chairman and CEO Mark Zuckerberg more than $15 billion.
Shares of Facebook fell 19 percent on Thursday, a day after the world's largest social media company disclosed that its quarterly revenue did not live up to expectations and that its user metrics grew slower than some on Wall Street had predicted.
The drop in the price of the stock cost Facebook founder, chairman and CEO Mark Zuckerberg more than $15 billion, and about $120 billion in shareholder value was wiped clean.
Thursday's earnings release was the first since Zuckerberg testified before Congress about his handling — or mishandling — of the Cambridge Analytica data scandal.
At that hearing, lawmakers also grilled Zuckerberg about issues involving privacy, and some Republicans accused Facebook of political bias against conservatives.
Before the stock opened lower on Thursday, Trillium Asset Management, which owns $11 billion in Facebook stock, filed a proposal to remove Zuckerberg as chairman, arguing he wields too much power as both CEO and chairman, especially given his 60 percent ownership of voting shares. That news was first reported by Business Insider.
At the end of trading on Thursday, Facebook shares plunged $41.63 to $175.87, leaving the company with a still-hefty market capitalization of $510 billion, more than Walt Disney, Comcast and 21st Century Fox combined.
Facebook said after the closing bell on Wednesday that quarterly revenue came in at $13.23 billion, while analysts expected $13.36 billion. Its daily active users sat at 1.47 billion, shy of the 1.49 billion Wall Street had anticipated.
"Even the best hitters strike out sometimes," Wedbush Securities analyst Michael Pachter said Thursday. "We expect Facebook to get back on track by the end of 2019 ... the sell-off is overdone and largely unwarranted."