$123,400,000,000 yes it is the value that facebook just lost in wake of the earnings report that failed to meet the expected estimates.
Facebook shares opened at $174.89, down 19.6 percent compared to yesterday’s closing price of $217.50 the earlier market capitalization for facebook before this drop was $629.6 billion and now its valued at $506.2 billion.
What made this sudden and biggest drop in its prices is not any other data breach or fraud but it is a well-known market phenomenon that impacts every company and it is regarding the earning reports of a company.
$123,400,000,000 is a huge number the market cap of bitcoin is 141 billion and this fall is as if 4 twitters were wiped out.
facebook’s earnings report came in and it missed the expectations slightly which could only have minimalistic effects but what further may have caused a ripple effect for its reputation in the minds of investors are the comments made by the company’s chief financial officer, David Wehner.
David Wehner, indicated that Facebook’s privacy scandals and other challenges it faces will have a negative impact on the revenue in the coming quarters.
“We expect our revenue growth rates to decline by high-single-digit percentages from prior quarters sequentially in both Q3 and Q4,”
wehners comments on being publishing further crashed the stock prices,with all of this trouble at hand, Facebook needs to implement a better business model which is not as aggressive as its older models have proven for the user data and stuff. Furthermore facebook’s Europe user base is declining and has lost a significant amount of active users recently.
Tight competition strict laws and further distrust are not helping Facebook to grow as it used to grow, let’s see what the time ahead has to bring for it and how it’s going to prevent itself from cracking.
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