Facebook’s $115 bln plunge dwarfs Apple’s $60 bln drop in 2013
Well, you knew it would happen one day. After an incredible multiyear run, Facebook Inc. (NASDAQ: FB) finally got the comeuppance many of the bears have howled about for years. The revenues missed, guidance was very bearish, user data and metrics were bad and shops across Wall Street dramatically slashed their price targets.
“While most of the damage is done, the uncharacteristic level of the miss will leave many very cautious on the stock going forward,” wrote Lee Jackson on 24/7 WallSt.com.
Facebook on Thursday posted the largest one-day loss in market value by any company in U.S. stock market history after releasing a disastrous quarterly report, CNBC.com reported.
The social media giant’s market capitalisation plummeted by $119 billion to $510 billion as its stock price plummeted by 19%. At Wednesday’s close, Facebook’s market cap had totaled nearly $630 billion, according to FactSet.
No company in the history of the U.S. stock market has ever lost $100 billion in market value in just one day, but two came close. On September 22, 2000, Intel shed $90.74 billion in market value as the dot-com bubble burst. Earlier that year, Microsoft lost $80 billion from its market cap in one day. Other companies that have experienced similar oneday losses in dollar amount include Apple in 2013, when it lost $59.6 billion, and Exxon Mobil in 2008, when it lost $52.5 billion.
Facebook’s enormous loss in value came a day after the company reported weaker-than-expected revenue for the second quarter as well as disappointing global daily active users, a key metric for Facebook. The company also said it expects its revenue growth rate to slow in the second half of this year.
Several analysts downgraded Facebook’s stock, including Nomura Instinet’s Mark Kelley. “With stagnating core user growth, we think there is too much near- to mid-term uncertainty to recommend shares at this point,” Kelley, who downgraded the stock to neutral from buy, said in a note.
The percentage decline was also the worst in Facebook’s history.