Got a tip?:

Facebook Drops More Than 20% After Massive Selloff Unfolds

Today, Facebook (NASDAQ:FB) saw the biggest selloff in its history as a public company as it lost about $120 billion in market capitalization. The company announced that they were going to see a miss on their revenue expectations and showed massive user growth decline which rattled the market that caused this huge selloff.

Facebook (NASDAQ:FB) was trading at all-time high of $218 before it crashed to close down 19% at $176.26, which means that investors erased the entirety of the company’s 2018 gains. The company’s market cap at yesterday’s close was $630 billion; at the close of today’s trading day, it is now $510 billion!

The social media giant reported very solid net income of $5.12 billion for the quarter, which amounts to $1.74 a share, up from $3.89 billion or $1.32 a share in the year-ago period. The bottom-line beat was above analysts’ average estimates of $1.71 a share.

Profits saw a reasonable increase with sales of $13.04 billion, a 41.9% increase from a year ago, but that was lower than analyst estimates and previous growth rates. The daily user growth stayed stagnant in the U.S. and Canada, but significantly declined in Europe from the previous quarter.

What was worth noting was the fact the Facebook’s (NASDAQ:FB) Chief Financial Officer David Wehner disclosed that the tech company expects the revenue-growth slowdown to continue.

“Our total revenue-growth rates will continue to decelerate in the second half of 2018, and we expect our revenue-growth rates to decline by high-single-digit percentages from prior quarters sequentially in both Q3 and Q4,” he said on the conference call. He added that he still expects expenses to grow 50% to 60% from last year.

This major selloff could be a major opportunities for savvy investors looking to make a quick profit with a nice bounce back. Are investors overreacting to the slowed down revenue growth? Are investors forgetting that Facebook (NASDAQ:FB) owns Instagram which is just starting to become a tech giant of its own?


This article has been provided by a Bulls on the Street contributor. All content submitted by this author expresses their personal opinions, and should be examined as such for entertainment purpose only. All opinions considered are those of the writer, and may not necessarily represent fact, opinions, or bias of Bulls on the Street

Leave a Comment