The social media giant set a record for the worst single-day loss in stock market history.
Facebook set an infamous record on Thursday — the largest single-day stock market loss for any company in history. As CNBC reports, “The social media giant’s market capitalization plummeted by $119 billion to $150 billion as its stock plummeted by 19 percent. At Wednesday’s close, Facebook’s market cap had totaled nearly $630 billion, according to FactSet.” Facebook missed its quarterly revenue forecast and lowered its revenue outlook amid declining user growth.
Concern over privacy after the company’s failure to protect user data is the leading culprit for the social media giant’s increasingly negative public image. But add to that Facebook’s poor handling of the disinformation controversy — its new algorithms have proven to throttle traffic on conservative feeds and it even blocked the Declaration of Independence as “hate speech” — as well as the massive cost increases to advertise on the website. With all that blundering, it’s not surprising to see the company taking this hit.
Mark Alexander further notes that Facebook is trying to put a smiley face on the massive loss: “Company execs laughably asserted that the reduced revenues were due to its spending billions of dollars developing stronger privacy measures… Laughable because Facebook’s entire business model revolves around compromising the privacy of its users.”
Now Facebook CEO Mark Zuckerberg is facing renewed pressure to step down as the company’s chairman, something he has refused to do in the past. Will a stock bust in the middle of an economic boom finally do the trick? While Facebook has taken a face-plant, this good economic news should lift everyone’s faces. It appears that more Americans are busy working and fewer are sitting at home checking their Facebook feeds.