Facebook's 20%, $120B 1-day stock drop worst in USA history

Facebook shares sink 8% as Q2 revenue and user growth misses analyst estimates

Facebook stock dives nearly 20% on warning of slow revenue growth

The market capitalization of the social-networking giant was down by as much as $148 billion before recovering a bit later in the day.

Facebook Inc.'s scandals are finally hitting the company where it hurts: growth.

It's quite possible that Facebook's shares could recover and continue to climb.

Facebook suffered a blow in China on Wednesday when regulators there withdrew their approval of a company innovation hub to support local startups, the New York Times reported on Wednesday, citing a person familiar with the matter.

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Even though almost one-third of the entire planet uses Facebook, that user number and the revenue figure came in a shade below Wall Street forecasts, prompting the after-hours selloff. In September 2000, as the tech stock boom turned to bust, chipmaker Intel warned that its sales could slow, sending its stock price down more than 20 per cent.

But it stayed relatively steady after that, at least until the call started and David Wehner, Facebook's chief financial officer, began discussing the company's financial outlook.

On a call with analysts, Facebook advised it expected its revenue growth rates to be lower than the year prior, especially in the second half of this year. In case of the latter, Wehner noted that "total expense growth will exceed revenue growth in 2019", pushing down operating margins.

Of 47 analysts covering Facebook, 43 still rate the stock as "buy", two rate it "hold" and only two rate it "sell". Within minutes it was down 15%, then 18%, then 24%. All of this was enough to spook investors in the shares on the Nasdaq when the market opened on Thursday morning.

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This week has seen more embarrassment with the publication of a series of ads sent out on Facebook during the UK's European Union referendum in 2016. The company is still grappling with blowback from the revelation that political data firm Cambridge Analytica accessed data on up to 87 million Facebook (FB) users.

National Religious Broadcasters President Jerry Johnson told CBN News in an April interview that Facebook should apply the First Amendment to questions of speech; otherwise, he fears Christian and conservative voices will be silenced. In other words, there is practically nobody left to get on the platform. A Facebook spokeswoman declined to comment. The company doesn't make as much money from Stories as it does from its News Feed and other features on its site. Zuckerberg emphasized the investments the company has made to improve safety and security on the platform.

"This is a privacy wake-up call that the markets are delivering to Mark Zuckerberg", said Jeffrey Chester of the Center for Digital Democracy, a privacy advocate, according to The Washington Post.

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