The Other McCain

"One should either write ruthlessly what one believes to be the truth, or else shut up." — Arthur Koestler

Facebook Loses Record $119 Billion

Posted on | July 27, 2018 | Comments Off on Facebook Loses Record $119 Billion

 

The wheels of karma never stop turning:

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.
The social media giant’s market capitalization plummeted by $119 billion to $510 billion as its stock price plummeted by 19 percent. 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 Sept. 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. . . .
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.

What inspired this was not merely earnings:

Until Thursday, Facebook was enjoying enormous gains. The stock was up more than 23 per cent for the year, before it reported earnings after Wednesday’s close. By Thursday afternoon, all its gains for the year had vanished.
It was the details of Facebook’s report that seemed to spook investors. The company’s quarterly revenue fell slightly short of meeting the expectations of Wall Street analysts. And executives warned that the company would invest heavily in privacy and security, and that revenue growth would most likely slow in coming quarters. . . .
In March, the company’s handling of user data in the Cambridge Analytica scandal contributed to a backlash against the size and reach of the biggest tech businesses and raised concerns that regulators may soon crack down on these firms. Shares of Facebook fell 17 per cent in the days after news broke. By May, the company had erased those losses.

Facebook is a gigantic data-harvesting operation, by which people unwittingly forfeit their own privacy, providing information about themselves to Facebook, which then acts as a market broker. What the Cambridge Analytica story did was to give people a small glimpse into how information shared via Facebook can be exploited.

The fact that Facebook has sought to suppress conservative opinion on the site is also undoubtedly a contributing factor to their losses. The company has pandered to SJWs, and will pay a price.

“Get woke, go broke.”



 

Category: Economics

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