Tech firms prepare for share plunges as Facebook loses $128 billion

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A total of $128 billion was wiped off Facebook's value in just two hours following the second quarter briefing, the first since the Cambridge Analytica scandal and new European Union data rules came into effect.

But the Silicon Valley company's streak ended Wednesday when it said that the accumulation of issues was starting to hurt its multibillion-dollar business and that the costs are set to continue playing out for months.

The fleeing of one million users is but a drop in the ocean to Facebook, which now has over 2.2 billion active monthly over-sharers on its website.

The report, which marked Facebook's first full quarter since the Cambridge Analytica scandal, startled investors with a bevy of red flags about setbacks to its revenue and user growth.

Facebook Chief Executive Mark Zuckerberg's fortune took a more than Sh1.5 trillion ($15 billion) hit on Thursday, as the social media company suffered the biggest one-day wipeout in US stock market history a day after executives forecast years of lower profit margins.

The complaint filed by shareholder James Kacouris in Manhattan federal court accused Facebook, Mr Zuckerberg and chief financial officer David Wehner of making misleading statements about or failing to disclose slowing revenue growth, falling operating margins, and declines in active users.

All that turbulence caught up to Facebook on Thursday when a mixed earnings report forced some investors to dump shares of the company. That $120 billion plunge is the biggest-ever one-day loss in dollar value for a USA company.

Patsky said his company's next ask of Facebook and its board is just that - a separation of chair and CEO.

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That almighty crash comes as the result of Facebook shares collapsing by 18% when the New York Stock Exchange opened its doors.

Much of the latest drop in value has come from Facebook insiders selling more than $4bn worth of stock since details of the Cambridge Analytica data-mining scandal surfaced.

Some analysts, however, believe it's more than that.

During the call, Facebook Chief Executive Mark Zuckerberg tried to recast the disappointing earnings.

The single biggest loser is Mark Zuckerberg, Facebook's founder and chief executive, who owns almost 17% of the company.

Shares tumbled as much as 20 per cent in NY on Thursday as sales and user growth disappointed investors. "GDPR is an added head wind, albeit containable", he said.

Until now, he said, there was a sense that the vast majority of users didn't fully understand Facebook's business. "That's going to have a negative impact on revenue growth", he noted.

"Looking beyond 2018, we anticipate that total expense growth will exceed revenue growth in 2019", he said.

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