On Thursday morning, Facebook stock dropped 20% as the public company is off to face the worst day in its history. Shares fell to a low of $174.48, and it halted stock trading on Wednesday at $217.50, CNBC reported.
Facebook lost the tech stock a total of about $120 billion in market value in just a few hours, bringing down the rest of the sector with it. The social media network was recovering from the Cambridge Analytica fiasco among other scandals as it seems that Facebook’s bad press is catching up to them, slowing down their numbers.
Facebook’s advertising revenue estimates missed the mark, according to CNBC, and even had to warn investors that its growth rates were going to be lower than expected.
“The social network added 22 million daily active users globally during the quarter,” CNN said. “That represents a slowdown from the 41 million daily users it added in the same quarter last year.”
In the second quarter, Facebook recorded 279 daily users – which was down from 282 million in the former. The corporation added new data protection rules and departed from their trending news feed before their most recent stock dive.
Analysts who keep track of Facebook felt “blindsided” by the sharp drop, asking the company’s executives “for more information on exactly how the company’s financial future had changed so dramatically,” Bloomberg said.
“The company was bombarded by public criticism over its content policies, especially in countries such as Myanmar and Sri Lanka where misinformation has led to violence,” Bloomberg stated. “… All of those problems are hitting amid a harsh truth for the company: Facebook, the social network with 2.23 billion active monthly users, can’t grow forever.”
Facebook said that it has a plan to increase spending on new feats like virtual reality and artificial intelligence to supplement their video content. The company’s plunge amid recent changes is definitely a setback for the social media network, as they seek to bounce back in the following quarters.
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