Wipeout! Facebook sheds $100B in market cap value

Stock dives 19% over fears of slow sales, user growth

SAN FRANCISCO – Facebook shares dove 19 percent Thursday, shedding about $100 billion in market value, for the biggest one-day wipeout of stock market value for any U.S. company.

The decline, fueled by the social network’s slowing growth, marked Facebook’s largest market drop ever, eclipsing a 12 percent drop July 27, 2012. Another 7 percent drop March19, the Monday after news of the Cambridge Analytica crisis broke, caused a $36.4 billion decline in Facebook’s market value.

Facebook’s one-day swoon surpassed Intel’s $91 billion loss in September 2000, the previous largest loss of value in one day, according to Bloomberg. The drop was based on all shares outstanding, Bloomberg said.

Chief Financial Officer David Wehner triggered the sell-off when late Wednesday he said Facebook’s sales growth would continue to slow the rest of the year. Shares had declined 7 percent after hours, then tumbled further after the comments on a call with analysts.

Despite the steep drop of one of Wall Street’s leaders, its pain did not spill over to the broader U.S. stock market. The Standard & Poor’s 500 stock index, which includes Facebook and 499 other big U.S. companies, lost 0.3 percent. The Nasdaq Composite lost 1 percent.

The sell-off points to growing concerns that Facebook will not emerge unscathed from the controversies it faces. The slide began after Facebook reported second-quarter results Wednesday. It was the first full financial report since Facebook became embroiled in the Cambridge Analytica scandal in March.

Facebook recorded sales of $13.23 billion for the three months ended in June, short of the $13.3 billion Wall Street anticipated.

Also alarming: Facebook’s growth is slowing with users in some of its most lucrative markets. Facebook reported its slowest growth rate ever, with 2.23 billion people logging in at least once a month in June, below the 2.25 billion analysts expected.

Growth in the number of users who logged in each day fell short, too, up 11 percent year over year at 1.47 billion but still less than the 1.49 billion anticipated. Daily usage was unchanged in Facebook’s biggest market, the U.S. and Canada, at 185 million daily users. Facebook saw a decline in Europe to 279 million daily users. Net income was $5.11 billion, or $1.74 a share, beating analysts’ estimate of $1.71 a share.

Snider reported from McLean, Virginia; Adam Shell contributed from New York.