Facebook, Inc. FB plunged 19 percent Thursday after the company’s second-quarter earnings report. Incredibly, the earnings crash shaved more than $120 billion off of the company’s market cap in a matter of hours.
Experts React
Facebook’s disastrous day has been the talk of Wall Street. CNBC’s Carl Quintanilla tweeted that only one other time since September 2014 has a FANG stock to gap down by more than 15 percent following a quarterly earnings report.
Since September 2014, “only once has a FANG stock gapped down by more than 15%. (Netflix in October of 2014.)” - @bespokeinvest
Here’s how they finish the day: pic.twitter.com/DCsNIeKrpE
— Carl Quintanilla (@carlquintanilla) July 26, 2018
CNBC’s Joe Terranova tweeted that Facebook’s day is historically bad.
In fact, Facebook’s trading action on Thursday could result in the most destruction of value by a single stock in a single day ever. Intel Corporation INTC currently holds the record for biggest single-day market cap loss at $90 billion during the bursting of the dot com bubble back in September of 2000.
#Facebook is heading for an undesirable record! Largest USD market cap loss of all time. ht @ArendJanKamp pic.twitter.com/nuIT43lYkD
— jeroen blokland (@jsblokland) July 26, 2018
Value Destruction
Just how much value have investors lost? General Electric Company GE, Paypal Holdings Inc PYPL and salesforce.com, inc. CRM all have market caps of less than $120 billion. In fact, so does 91 percent of the entire S&P 500. A $120 market cap represents more than twice the size of General Motors Company GM and about four times the size of Southwest Airlines Co LUV. A $120 billion loss is more than the annual gross domestic product of Ukraine ($109.3 billion) and Puerto Rico ($98.8 billion).
Unfortunately for millennials, young investors are taking a large portion of the Facebook hit. Last year, TD Ameritrade reported that Facebook was the second most commonly-owned stock among millennial investors.
Facebook shares closed Thursday at $176.25. Its market cap now stands at around $503.5 billion.
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Facebook 'Hit Reset' On Expectations: Wall Street Responds To The Lackluster Quarter© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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