The Latest: Facebook heading for its worst trading day ever
NEW YORK (AP) — The Latest on the aftermath of Facebook’s release of user growth and expectations for the company ahead (all times local):
The erosion in the value of Facebook as it is perceived on Wall Street involves some staggering numbers.
In midday trading Thursday, the company’s market value (the number of outstanding shares multiplied by the value of a single stock), fell by more than $122 billion.
That means that in one day, just the decline in Facebook’s market value is roughly the entire market value of McDonald’s or Nike, give or take a few billion. And it far exceeds to total market value of major U.S. multinational corporations such as General Electric, Eli Lilly or Caterpillar.
The company still has a total market value close to $511 billion, which exceeds the annual gross domestic product of countries like Poland, Belgium and Iran.
Facebook was downgraded by a number of industry analysts who were caught off guard by slowing growth in the wake of the Cambridge Analytica scandal.
Company shares fell 19 percent Thursday.
Facebook may be heading for its worst day on the markets in its history a day after the company revealed that user growth, amid swirling questions about how their information is used, has slowed.
The stock plunged 19 percent in early trading Thursday, eradicating well in excess of $100 billion in market value.
The social media company’s financial results, released late Wednesday, fell short of Wall Street expectations as the company continues to grapple with privacy issues. It also warned that revenue would decelerate as it promotes new products
Facebook had 2.23 billion monthly users as of June 30, up 11 percent from a year earlier, but well short of what industry analysts had been expecting.
The results are from the first full quarter following the revelation of the Cambridge Analytica privacy scandal. The company is also contending with European privacy rules that went into effect in May.