Facebook takes a beating on Wall Street in its worst trading day


Facebook takes a beating on Wall Street in its worst trading day

A 19% loss saw 119 billion dollars sliced from the company’s market value.

The logo for Facebook (Dominic Lipinski/PA)
The logo for Facebook (Dominic Lipinski/PA)

A 19% loss in Facebook’s stock has chopped 119 billion US dollars (£91 billion) off its market value.

It was the company’s worst trading day since going public in 2012, and among the biggest one-day losses of market value in US stock market history.

The loss came a day after Facebook revealed that its user base and revenue grew more slowly than expected in the second quarter as it grappled with privacy issues.

Those revelations stunned investors, who believed the company had weathered the recent scandal over users’ privacy and pushed the stock to an all-time high Wednesday of 217.50 dollars.

The erosion in value involved some staggering numbers.

It was a grim day for Facebook on Wall Street (Yui Mok/PA)

By midday trading on Wall Street, the company’s market value (the number of outstanding shares multiplied by the value of a single stock), fell by more than 122 billion dollars.

That means that in one day, just the decline in Facebook’s market value was 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 US multinational corporations such as General Electric, Eli Lilly or Caterpillar.

The company still has a total market value close to 511 billion dollars, 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% on Thursday.

Press Association

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