What is behind the collapse of Facebook in the stock market, the biggest fall in history for a business in a single day

2018 is not a good year for Mark Zuckerberg and Facebook, the company that he co-founded and directed

After the scandal caused by the data filtering of thousands of people. Social network users at the company Analytica Cambridge and criticizes its inability to fight the spread of false news, now the opposite comes from the stock market.

• What are the changes in Facebook that promise Mark Zuckerberg to avoid another case like Cambridge Analytica

? Facebook collapsed on Thursday after the company announced to investors that its rate of profit is declining while that of spending is increasing.

In total, their shares lost almost 19% of their value, which translates into a loss of over $ 120,000 million, the largest in history for a company in only one day.

This fall also brought down the Nasdaq index, which closed

"The GDPR (General Regulation on Data Protection) was an important moment for our industry, and we found a decrease in About one million people a month in Europe. "

The company indicated that it was hoping to increase its spending by 50% or more in its attempt to improve the way it monitors content, follows advertisers and processes user data, areas in which it has been submitted to the review of the regulators.

In addition, the company anticipates that earnings growth will be affected when people begin to use new options to limit advertising.

Facebook, which owns Instagram and WhatsApp, said its growth forecast for the rest of the year will be reduced to a 30% margin, compared to 44% achieved in the last quarter.

Risk of contagion?

Although Facebook's year-over-year earnings growth was over 40%, nervousness seemed to extend to stock values ​​of other technology companies [19659007] Twitter, which has faced similar criticisms of Facebook and will release its results Quarterly this Friday, closed Thursday with a 3% decline.

Other companies were more resilient.

Alphabet, owner of Google and YouTube, which also depends on digital advertising, the day with a decline of less than 1%, while Spotify grew by nearly 4.5%.

Unique Factors

Many of the factors that affect Facebook are unique to the company, said Daniel Ives, strategy director of GBH Insights.

The social network was subjected to scrutiny, knowing that it did not prevent the filtering of data from millions of users to the British company Cambridge Analytica.

Facebook has also changed the appearance of the wall of its users, highlighting the publications of family and friends compared to those of companies or organizations, which Zuckerberg has already warned.

BTIG Research badyst Richard Greenfield

"We were very stressed at the Facebook conference and we were able to feel the fear / panic in the voice of investors after . "

point of view, Facebook is still a great opportunity for advertisers and the investments they make today will translate into longer-term growth.

"Mobile is eating the world and Facebook is a must-attend business to benefit from this change"

But for Daniel Ives, the future of the social network is not so encouraging: "(Facebook) offered a very disappointing forecast for him the second part of this year and 2019 and that will have a significant weight on short-term shares. "

Dave BBC's San Francisco BBC tech correspondent understands the most optimistic and pessimistic.

"In general, it seems that people do not abandon Facebook, say, those who interact at least once a month – remains stable in the United States, has dropped slightly in Europe and is growing in the rest of the world, "he said

" But for a company accustomed to Throughout the year, the lack of significant growth worries, if not panic. "

Less affluent

Thursday's bad data personally affect Zuckerberg himself, who in the course of a day loses nearly US $ 16,000 million

That made him fall two places in the Forbes list of billionaires of the world: he rose from fourth to sixth place, behind Spanish fashion mogul Amancio Ortega and American businessman Warren Buffett.

Zuckerberg now 81.9 billion US dollars "poorer" than Jeff Bezos founder and president of Amazon, who still leads this list.

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