Facebook’s $120 Billion Tank is the Biggest One-Day Stock Loss Ever

The US Stock Market closing on Wednesday estimated Facebook worth USD 630 billion. One day later, it tumbled to USD 510 billion. Roughly USD 120 billion loss in market cap tops the list of biggest one-day routs in recent stock market history — and by a very wide, USD 30-billion margin.

Facebook on Thursday posted the largest one-day loss in market value by any company in US stock market history after releasing its quarterly report.

According to Reuters, at least 16 brokerages cut their price targets on Facebook after Chief Financial Officer David Wehner startled an otherwise routine call with analysts by saying the company faced a multi-year squeeze on its business margins.

That “bombshell,” as one analyst termed it, played into concerns on Wall Street that Facebook’s model could be under threat after a year dominated by efforts to head off concerns over privacy and its role in global news flow.

No company in the history of the US stock market has ever lost USD 100 billion in market value in just one day, but two came close.

On 22 September, 2000, Intel lost USD 90.74 billion in market value as the dot-com bubble burst. Earlier that year, Microsoft shed USD 80 billion from its market cap in one day.

Other companies that have experienced similar one-day losses in dollar amount include Apple in 2013, when it was trimmed by USD 59.6 billion, and Exxon Mobil in 2008, when it lost USD 52.5 billion.

Facebook’s margin fell to 44 percent in the second quarter from 47 percent a year ago as it spent heavily on security and initiatives to convince users the company was protecting their privacy.

The company also said revenue growth from emerging markets and the company’s Instagram app, which has been less affected by privacy concerns, would not be enough to repair the damage.

The impact on the rest of the FAANG group of high-flying tech stocks was marginal.