Facebook just had its worst week in the company’s history



Once a darling of Wall Street, Facebook has always been one of the market's best-performing tech stocks but with its announcement this week that the company's growth may be slowing after an, it's becoming apparent Facebook's prosperity isn't guaranteed, reports CBS News' Bianna Golodryga. MarketWatch reports the decline, which erased about $120 billion United States dollars in market value, is both the largest single-day percentage drop ever and the largest market value loss in a single day, as well.

Despite the record stock price tumble, the tech giant still made $13.2 billion (€11.3 billion) in the second quarter of 2018, a year-on-year rise of over 40 percent.

Wall Street didn't take too kindly to that: Facebook's stock price dropped almost 20 percent in after-hours trading.

"Facebook generated $13.23 billion in second-quarter revenue - up 42 percent year-over-year - though it missed analysts' estimates at $13.36 billion", Ciaccia noted.

According to techcrunch.com, it seems as if Facebook announced the stat in hopes of deflecting attention from the fact that its user count shrank in Europe and was flat in the U.S. and Canada, contributing to extraordinarily low monthly and daily user growth.

Facebook's Seattle engineering center.

Patsky said his company's next ask of Facebook and its board is just that - a separation of chair and CEO. And it seemed Facebook would shrug off the recent rash of scandals, too - Russian election interference, the mishandling of as many as 87 million people's personal information by Cambridge Analytica and the unchecked spread of fabricated news.

North American DAUs remained flat despite the fallout from the Cambridge Analytica data leak scandal and fake news issues. While several analysts downgraded the stock, others say they still have faith in the company to grow over the long-term.

7 26 18 biggest market cap drops COTD
Business Insider Joe Ciolli Andy Kiersz data from Bloomberg

Wehner gave three different reasons why the company's revenue growth would decline: currency headwinds, greater investments in new kinds of content-sharing, like disappearing videos, and greater user control over privacy - a direct response to criticism the company has fielded.

A plan to fire Mark Zuckerberg as chairman of Facebook, leaving him just as CEO of the social media company staggered by a $119-billion loss on Thursday, has been drawn up 10 months before the next shareholder's meeting, the Business Insider reported.

"We think that's the right thing to do for the business", he said.

The news also hit Mark Zuckerberg's pocket.

"We continue to focus our product impact on putting privacy first, and that's going to have some impact on revenue growth", said Facebook chief financial officer David Wehner on the earnings call.

While gargantuan in sheer number, the drop in Facebook's market value doesn't spell the end for the company.

Declining user growth, growing privacy awareness, and dwindling advertising profitability all seem to indicate trouble for the company in the future.

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