Facebook's earnings disaster has it on pace to lose $120 billion in market value — which would be the biggest wipeout in stock-market history (FB)

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Screen Shot 2018 07 26 at 11.18.06 AM
Screen Shot 2018 07 26 at 11.18.06 AM

MarketWatch

  • Facebook's stock is taking a beating after a disappointing second-quarter earnings report that saw the company miss revenue expectations and warn of slowing growth ahead.

  • Shares were trading 19% lower on Thursday, putting them on pace to wipe out $120 billion in market value. That would be the biggest single-day drop in stock-market history.

  • Follow Facebook's stock price in real time here. 

Facebook is on pace to make the wrong type of history.

The Mark Zuckerberg-led social-media titan saw shares drop more than 19% on Thursday following a disastrous second-quarter earnings report. The damage was swift and unforgiving in after-market trading on Wednesday as Facebook plummeted as much as 24% within an hour. The selling has now spilled over into regular trading.

Investors took issue with sales and subscriber numbers that fell short of expectations. But perhaps most damaging of all, the company warned of a growth slowdown. Facebook is now headed for its biggest single-day drop since it started trading publicly in May 2012.

But that still undersells the magnitude of Facebook's earnings disaster. On a market-capitalization basis, the company is on pace for a $120 billion loss, which would be the biggest in stock-market history.

And as you can see in the chart, it's not particularly close.

7 26 18 biggest market cap drops COTD
7 26 18 biggest market cap drops COTD

Business Insider/Joe Ciolli/Andy Kiersz, data from Bloomberg

It must be noted, however, that for a loss of this magnitude to be possible in the first place, a company must be gigantic. Facebook achieved its $630 billion valuation (now $515 billion) through an eye-popping 472% run-up in its stock price since going public. That it's seeing such a big chunk erased shows just how fickle investors can be about companies that already possess such stretched valuations.

Speaking of market-leading tech stocks, Facebook's mega-cap counterparts Apple, Amazon, Netflix, and Alphabet all lost more than 1.5% at their overnight lows, and the Nasdaq 100 index dropped 1.2% in regular trading hours.

While analysts were stunned by Facebook's growth guidance and subsequent stock plunge, Business Insider's Jim Edwards pointed out that Zuckerberg warned three months ago that bad news was coming, and no one listened.

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