Facebook suffers the biggest collapse of the stock market in the history of the United States

Facebook has accumulated a lot of milestones in its pioneering journey. Now, the social media giant is ready to add one that it would no doubt avoid: the biggest stock market crash in American history.

The title of the social media giant, among the most widely held in the country, plunged 19% after Facebook warned that its torrid growth slows among the concerns of the user-privacy and privacy. other controversies that have shaken the business in recent months.

The stock plummeted US $ 41.24 ($ 55.85) to US $ 176.26 per share, wiping out $ 120 billion of Facebook's global stock market value and lowering it to 511 billion US dollars.

The loss was the largest daily drop in the dollar for a publicly traded US company in history in September 2000 during the tech crisis, reported Bloomberg, although the decline in the price of the dollar was the largest. Intel is even bigger when it is adjusted for inflation. Exxon Mobil, already shocked by the financial crisis and the recession of October 2008, lost $ 53 billion, a miserable Wednesday, this month. And the slowest earnings growth at Apple in 10 years resulted in a loss of nearly 60 billion US dollars on January 24, 2013.

The fall also wiped out $ 16.6 billion from Facebook. Zuckerberg's wealth related to his stock ownership of the company. Yet even after the loss, Zuckerberg's stake was worth about 70.8 billion US dollars.

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Simply put, stock market penchant "has everything to do with not being able to grow indefinitely," said Brian Wieser, badyst at Pivotal Research Group.

Financial comeuppance for a company that had revenues last year, nearly 41 billion US dollars were imbued with irony.

Earlier this year, Facebook went through an uproar surrounding the privacy of more than 1.5 billion people who use its site every day.

After learning, the company had shared user data collected from 87 million accounts with Cambridge Analytica policy consulting firm.

Zuckerberg was forced to testify before US lawmakers three months ago, and Facebook began making changes to further protect users' data

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But everything changed in minutes after Facebook announced its second-quarter results after the stock market closed.

"It's infuriating"

In trading after office hours, investors quickly abandoned the stock, leaving some badysts angry that Facebook did not disclose its slowdown in growth earlier

"C & Is infuriating, to be honest Stifel Financial Corp. said in a note to customers. "Mark Zuckerberg has been talking about and writing about the company's repair for months now and yet management is now discussing his impact on financial results. "

Facebook, of course, continues to grow rapidly, with both advertising revenue and total revenue increasing 42% in the quarter compared to the previous year , and its profit jumped 31% to reach 5.1 billion US dollars – as much earnings as most companies would envy

. Street was expecting even better earnings for justi proud the price of Facebook's stock. And because investors typically buy stocks at prices based on the anticipation of future earnings, Facebook's admission that future revenue growth would slow down was a hard pill to swallow.

Facebook's business figure of 13.2 billion US dollars fell just before badysts expected $ 13.3 billion – the first shortfall on a revenue forecast since 2015. And that has not helped slow user growth in Facebook's two most lucrative markets: North America and Europe

Results were hurt by investments made by the company. 39; business to enhance security in the wake of the Cambridge Analytica scandal and a Russian misinformation campaign on its site. Facebook said it had to adhere to new stringent privacy protection rules put in place in Europe in May, which slowed advertising revenue growth in that country. If such rules are adopted elsewhere – as privacy advocates suggest – this could slow down the growth of listings in other markets.

The company has already made changes to its platform that have slowed revenue growth. Facebook can collect to fuel its advertising activity

Indeed, Scott Kessler, an badyst at CFRA Research, said the company was entering a new phase in which lawmakers and consumers around the world are more aware of their privacy. The changes intended to support Facebook's platform and users, but they will notably restrict growth and profits for at least the next few quarters, "said Kessler,

Facebook acknowledged that the environment more difficult will hurt the bottom line of the company .. warning about the limits of exponential growth.This is what especially frightened investors.

"We continue to focus our development of products on the protection of privacy, and this will have, in our opinion, an impact on revenue growth, "David Wehner, Facebook A financial agent, told badysts at a conference call Wednesday

Facebook also puts the spotlight on new technologies, such as its photo-editing Stories feature, which does not generate as much revenue as its news feed. "Our total revenue growth rates continue will slow down in the second half of 2018, "said Wehner.

Devitt, the Stifel badyst, said the second quarter results constituted a "total reset" of Facebook. he "kept the stock on the sale because the damage is probably done and there is good business here despite the management."

Other badysts said that it was too early to say whether the second quarter was a turning point, while some said the market surpbaded Twitter dropped 2.9 percent and Snap, Snapchat's parent, lost 0.2 percent ” width=”620″/>

Richard Greenfield of BTIG Research said that security updates in Europe, for example, were a one-shot hit for the company.

"It's a step back, not a headwind" Greenfield wrote in a research note titled "Facebook's death was very much exaggerated (by Facebook)."

Greenfield also noted that Facebook has an important safety net in its growing affiliates: Instagram, Messenger and WhatsApp. These apps correspond to the near-total approach of Facebook on mobile, where the company achieved 91 percent of its advertising revenue in the second quarter.

Another good news for technology investors: at least, the brutal sale did not happen

Twitter dropped 2.9% and Snap, Snapchat's parent, lost 0.2 %. Amazon.com has dropped 3 percent and Alphabet, Google's parent, has even gone up 0.8 percent.

These results were reflected in the market indices.

The Nasdaq composite index, which is laden with technology stocks, fell on Thursday, but the Dow Jones industrial average climbed 0.4 percent to 25,527.07

Facebook ended the session after opening hours down 20 percent to US $ 173.16, a loss of about $ 126 billion in market capitalization, having decreased up to 24% earlier.

Bloomberg / Los Angeles Times