Facebook Stock Suffers Largest One-Day Drop In History, Shedding $119 Billion

Facebook is experiencing one its worst days as a publicly traded company. According to CNBC, Facebook lost about $119 billion of its value on Thursday, marking the biggest one-day loss in U.S. market history. From the report: The company's shares plunged $41.24, or almost 19 percent, to $176.26 a day after the social media giant reported disappointing results. The slide is the largest decline in market capitalization in history, exceeding Intel's $91 billion single-day loss in September 2000, according to Bloomberg data. Founder and CEO Mark Zuckerberg saw his fortune drop by $15.9 billion to roughly $71 billion. His personal loss alone, if only on paper, exceeds the value of companies such as Molson Coors and Macy's, which have market values of $14 billion and $12 billion, respectively. Investors were spooked by Facebook's forecast showing that its number of active users is growing less quickly than expected, while the company also took a hit from Europe's new privacy laws.

Comments

Retirement

[110010001000]

This is a bummer. My entire portfolio is Facebook, Netflix and Tesla. Let me go check to see how they are doing...

Re: Retirement

[110010001000]

These tech stocks are priced with massive growth baked in. No one cares about profit or debt, just growth, in tech stocks. Eventually you run out of people that sign up your website, or are willing or able to buy a $50,000+ electric vehicle and your growth ends. By that time, the insiders have cashed out enough of their positions to get rich, but the individual suckers get screwed over. Tesla has a way to go, but likely 2019 will be the end of Tesla. The Q2 report will be "good", though.

Re: Retirement

[Rei]

Note that if you can't even follow news properly, you probably shouldn't be messing with investment. The "refund" discussion wasn't with parts suppliers, it was concerning ongoing unfinished capex projects. Capex != parts. And it went out to fewer than 10 companies.

It appears that someone at one of the companies that got the letter thought that it was going out to all of Tesla's thousands of suppliers and thus wouldn't get in trouble for leaking it; the fact that this incorrect was already discovered in the first article on the topic of the letter, even before Tesla responded. It's a pretty safe bet that, given how few letters Tesla sent out, that they already know who leaked the letter, and I imagine that they won't be receiving any future contracts.

Re: Retirement

[110010001000]

Thats pretty amazing that Tesla has thousands of suppliers. But I am sure that being $10 billion in debt, firing 9% of your employees and asking for retroactive refunds is OK. Nothing to worry about. Because it is a growth stock and growth will continue forever!

Re: Retirement

[Rei]

Total assets = $27.3B
Total liabilities = $21,6B

Secondly, get your story straight: is Tesla's SG&A too high and they should be cutting back on it, or is cutting back on SG&A spending a sign of doom? You need to pick one story and stick with it.

Third, there is nothing unusual about automakers asking for refunds on ongoing contracts. Unfair? Sure, but welcome to the automotive industry. When you have the bully pulpit, you can get away with things like that.

Lastly, nobody said "forever". But given that they're simultaneously attacking multiple markets each worth hundreds of billions to trillions of dollars, yes, they're only just getting started. Nobody is anywhere close to the rate of EV production scaleup they've achieved this year and are on track to continue in the next coming years. 2-3 years from now that situation may change, given what some established automakers are finally starting to invest in EVs. But until then, Tesla stands alone. It doesn't matter if you're GM, VW, or anyone else - you can't magick Gigafactories into existence overnight.

Re: Retirement

[tehcyder]

It's not about whether it's a good report or a bad report. It's about whether it's a better or worse report than people are expecting.

That's a point worth repeating.

As I understand, the problem was that the CFO used the term "decelerate" to refer to Facebook's slowing growth, and this rang alarm bells, presumably among people who think that a decrease in the rate of increase of subscribers is somehow the same thing as an actual decrease in the number of subscribers.

Tech stocks seem generally to be based on the idea that you have to have a continuous upward curve on the rate of increase of sales/subscribers/profit/whatever. So if you double your income one year, then 'only' increase it by 60% the next year and 40% the year after, this is some sort of disaster.

Re: Retirement

[Dragonslicer]

1). They rely on the grid for their power, which is supplied by carbon producing minerals. Coal/Natural Gas.

That is not at all universally true. Many parts of the world get a significant amount of electricity from solar, wind, hydroelectric, or geothermal, and the general movement is in that direction. Also, large power plants are more efficient and better able to contain waste products than large numbers of small engines.

THE END IS NIGH, Zuckerbook!

[Rick Schumann]

Better put your affairs in order, Zuckerbook, the TechReaper is coming for you. All the signs and portents are present!

Time to bail out of Zuckerbook, folks. Zuckerbook is Old and Busted, time to scamper off to the New Hotness, whatever that is.
Really, leaving now will do Zuckerbook a favor by making it's death swifter.

Re:119 billion, 16 billion

[110010001000]

That would be trillion. If the GDP of the US was only 20 billion we would be in big trouble. As it is, we are in big trouble, but not THAT bad.

Sucks for investors..

[Anonymous Coward]

but has facebook made our lives better? If it vanished tomorrow would it matter? Like tobacco companies?

Simpson: Nelson: Ha-Ha!

[UnknownSoldier]

Oh look, imaginary value dropped. Sucks to be you.

When is the /. article for when Fuckerberg takes a shit?

--
Insecure children censor.
Adults communicate about taboo subjects, and laugh.

...normally this would be a buy opportunity...

[ole_timer]

but not now

Re: ...normally this would be a buy opportunity...

[ole_timer]

know not hope...advertisers - the source of revenue for them - are running for the exits

Re:119 billion, 16 billion

[Fly Swatter]

Anyone that went to a competent school in modern times should know that number is way off. Read the chart's fine print. It's also a sign of how ridiculously mind numbing economics numbers have become. How do you mentally imagine 20 trillion of anything?

Inverted

[The Evil Atheist]

Headline should be: "Facebook suffers over-inflated stock prices for X years."

Re:119 billion, 16 billion

[ShanghaiBill]

The market cap of Facebook fell from the GDP of Argentina to the GDP of Belgium, a difference of the GDP of Kuwait.

List of countries by GDP

This is actually an apples-to-oranges comparison, since market cap is a measure of assets while GDP is a measure of income.

Re:The Stock Market is Fucking Stupid

[Narcocide]

Oh, you think they're stupid? If you haven't figured out by now that stock prices are entirely based on wishful thinking then I've got some bad news for you...

It's not a big deal

[mysidia]

They've lost a little less than one year of stock price increases --- which also happened before last year. If you were in on Jun 1, 2017 then you still have a slight gain, and if you were in before that date you still have a huge gain.

This is just a 18% bump down, and chances are it will recover back up from bad news ---- such minor retracements happen all the time, and it's not too significant, as long as it doesn't continue dropping... time will tell.

Re:It's not a big deal

[mysidia]

On on 10/2/2017, Facebook was at $172/Share, On 3/26/2018, Facebook was at $157.20/Sh, Today they're at $173/Share.

Yes.... so far this looks like a minor retracement; we'll see in a few weeks if they recover or if this may be the start of a new trend,
but we don't see that there's some super major event.

Re: No such thing as a market cap

[phantomfive]

Well you are definitely wrong with your last point: when public companies get bought, the buyer usually pays MORE than the market cap. It is true that the stock wasn't all bought at the current price, but with a stock that is high volume like Apple, it still takes a huge infusion of cash to move the stock that much.