Facebook is sued after stock plunge 'shocked' market

Facebook is sued after stock plunge 'shocked' market

Facebook is sued after stock plunge 'shocked' market

Those problems hadn't mattered to the success of the business - until now.

In a sign of just how bullish investor expectations were, though, the collapse merely returned Facebook shares to a level last seen in early May. "Earnings per share were $5.07, smashing analysts" estimations of $2.50.

Facebook has been an omnipresent part of American news for what seems like all of 2018, and rarely with a positive connotation.

The drop in share price sent Mark Zuckerberg's fortune tumbling by US$16.8 billion, which could send him sliding down the Bloomberg Billionaires Index. And the increased spending aims, among other things, to prevent a replay of the fake news and propaganda that Russian agents unleashed on an unguarded Facebook in an attempt to sway the 2016 presidential election. "Our view is that the company is far from out of the woods", Brian Wieser of Pivotal Research said. The company is still grappling with blowback from the revelation that political data firm Cambridge Analytica accessed data on up to 87 million Facebook (FB) users. Analysts were expecting $2.1 billion, according to Thomson Reuters. Facebook attributed the weaker outlook to unfavorable currency conditions, investments in new products and bolstered privacy tools that may put the brakes on breakneck revenue growth.

Some investors were also dismayed with Facebook's revelation about Instagram Stories, which allow users to post videos or photos that disappear after a day.

Windsor added that Facebook is forced to hire more people to handle tasks such as filtering inappropriate content after discovering the limits of artificial intelligence.

While Facebook faces the worst week in the company's history, it still holds the world's largest repository of user information.

Other prominent social media slid Thursday afternoon. There are suggestions that Facebook itself has been hinting at a slowdown for some time - but the markets failed to see it coming, hence their panic.

"A CEO who also serves as chair can exert excessive influence on the board and its agenda, weakening the board's oversight of management", the proposal says, according to the Business Insider.

Cutting Zuckerberg's influence on Facebook has previously been rejected by shareholders.

At the stock's lowest point, more than $148 billion of the company's value - significantly more than the entire market cap of IBM ($134 billion) - had been wiped out.

The revenue guidance from the company was "unprecedented", said Gene Munster, an analyst at Loup Ventures, in a note to investors.

Facebook suffered a blow in China on Wednesday when regulators there withdrew their approval of a company innovation hub to support local startups, the New York Times reported on Wednesday, citing a person familiar with the matter.

The huge fall came after Facebook published its earnings report for the second quarter of 2018, which revealed the company is growing at a slower rate than predicted.

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