Facebook sued after stock plunge ‘shocked’ market

George McgeeAug 01, 2018

Zuckerberg freefall: In one of the biggest single-day drops in history, Facebook has officially dropped $123 billion in stock market value, as of Thursday.

The lawsuit is designed for class-action status and seeks unspecified damages.

Shareholders often sue companies in the United States after unexpected stock price declines, especially if the loss of wealth is large.

Facebook's decline significantly outpaced the $91 billion that Intel lost in September of 2000, during the original dot-com bust.

Zuckerberg, on Wednesday, July 25, 2018 lost $16.8 billion in nearly two hours as the Facebook shares tumbled.

Both the slower growth forecast and heavier spending reflect problems largely of Facebook's own making.

But analysts attributed the user growth shortfall largely to European privacy rules that went into effect in May, not to the furor over the political consulting firm with ties to President Donald Trump, which improperly accessed the data of tens millions of Facebook users.

The more than $15 billion in net worth that Zuckerberg lost on Thursday is roughly equal to the wealth of the world's 81st-richest person, now Japanese businessman Takemitsu Takizaki, according to Forbes real-time data.

More worrisome was the number of daily active users, which grew by just 22 million - the lowest such number since at least 2011.

Currently, its stocks are at US$174.89 down 0.78 per cent.

The S&P 500 technology index fell 2.0 per cent, the most among the major S&P sectors.

The Dow, cushioned by promising developments in trade relations between the United States and the European Union earlier this week, added 1.57 per cent. Intel and Twitter's disappointing results overshadowed data from the Commerce Department showing the USA economy grew at a 4.1 per cent annualised rate in the second quarter, its fastest pace in almost four years, on higher consumer spending and farmers rushing soybean shipments to China to beat tariffs.

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