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After one of the worst weeks in its 15-year history, Facebook began this week to watch its stock sink for the fourth consecutive day, falling 3.5% to close Monday at $ 160.47 per share.
The last few days have brought waves of bad news for the social media company in that the New York Times Kara Swisher summed it up as a "biblically bad week": the departure of top leaders, including its product manager, Chris Cox; a widespread 14-hour blackout on Facebook, Instagram, Messenger, Oculus VR and WhatsApp; a federal criminal investigation into its data sharing partnerships with other companies; a UK report calling for stricter regulation of Facebook and other tech giants; and a new ad-boycott for hosting a live video of the shooting of a mosque in New Zealand.
Facebook closed Wednesday at $ 173.37, its highest level since last August, according to Yahoo Finance. But the steady pace of bad news has since caused a 7.4% drop in its stock over the last four trading days, a loss of nearly $ 37 billion in market value.
Facebook has already experienced periods of bad news, including periods that have a stronger impact on the price of its shares. Last August, Facebook shares lost nearly a quarter of their value in a day after reporting that the growth in the number of users had stagnated last July. This triggered a slump that brought Facebook's shares down to $ 123 in December. While shares of Facebook have since recovered $ 160, the action remains 27% lower than the record of 218 dollars reached last July.
A critical research report from Laura Martin, an analyst from Needham, added to Monday's decline. "We are concerned that regulatory, strategic, and strategic risks weigh more heavily on Facebook's valuation than investors currently believe, because of the inertia wheel created by Networks Effects," he said. Martin. "A negative network effect suggests that departures will continue."
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