Facebook, the biggest collapse in history on the stock market

Slower growth and concerns over new privacy laws cost Facebook more than $ 126 billion, as the largest value was destroyed by a company listed on US stocks. For Mark Zuckerberg, co-founder, CEO and first shareholder with 12.8%, the account of more than 16 billion

The origin of the collapse

To trigger the fall on the list of Nasdaq, where Facebook arrived yesterday losing nearly 20%, it's not so much the results of the quarter, closed by the social network with $ 5.1 billion in profits (+ 31%) and revenues up 42% to 13.23 billion, a little below the 13.25 billion expected from Wall Street. To put investors first, the slowdown in sales will continue in the third and fourth quarters and operating margins will decline significantly, from 44% currently to around 30% in the next few years, the CFO warned. Dave Wehner in the conference call with badysts. Two bad news market, which in the euphoria of high-tech companies had so far rewarded the Facebook title, amounted to $ 218.62, the new historical record. The big fall of yesterday says instead that trust in the social network is cracking and it is beginning to question the same business model.

Requests

On the one hand Facebook is obliged to make in accounts with the demand a greater protection and protection of personal data, not only in Europe, where the new regulation on the protection of the Privacy came into effect in May, but also in America after the Cambridge Analytica scandal. The news that the political consulting firm had used without identifying the personally identifiable information of millions of US and European users to influence their political views last March caused another dramatic collapse in the stock market and forced the co-founder and CEO Mark Zuckerberg, apologize and promise remedies before the US Congress and the European Parliament.

The decline of user growth

On the other hand, the Californian company is facing newer advertising formats that are less profitable than the forecasts, as in Stories on Instagram. While users increase less than in the past: at the end of June, they reached 2.23 billion against 2.25 billion, with stable growth in North America and a decline in Europe. The debacle of Facebook has sent the entire list of red technologies, unlike the Nyse, which took advantage of new negotiations between the United States and the European Union to avoid a trade war. Down about 3%, at $ 1,808, even Amazon expects quarterly accounts. Apart from the turnaround in the hours that followed, Jeff Bezos' group posted profits of $ 2.53 billion, up from $ 197 million a year ago, and revenues up 39% to $ 52.89 billion, thanks revenues from online sales and cloud computing activity