Facebook’s drop in stock price of nearly 20 percent marks the largest one-day stock market decline in U.S. history, at $119 billion.
Facebook has had a tough few days, seeing a massive decline in its stock price which fell by as much as 23 percent in after-market trading on Wednesday. The mass stock sale saw approximately $119 billion in market value destroyed, marking the largest one-day drop in the history of the American stock market.
The sudden drop in Facebook stock was a result of the announcement of second-quarter earnings which did not meet the companies predicted numbers. Although revenue had increased by approximately 42 percent, the number still fell short of analyst projections.
Similarly, the number of daily active users on the platform — an important metric for judging the success of a website or app — only grew by 22 million, the lowest growth figure since 2011. Facebook’s Chief Financial Officer warned that revenue growth would “decline by high single-digit percentages” until 2019.
In September 2000, during the original dot-com bust, Intel lost $91 billion while around the same time Microsoft lost $77 billion in a day. While it is true that Facebook’s loss of $119 billion in a day is the biggest one-day drop in U.S. stock market history, it should be noted that the large loss is partly due to Facebook’s massive valuation as a company. In previous years, companies were not valued as highly as Facebook is, so their losses were smaller.