Facebook stock loses $120bn in value after scandals

Facebook Inc CEO Mark Zuckerberg's fortune tumbled by US$16.8 billion in late trading Wednesday

After the earnings report, executives worked to explain the potential of Facebook's other properties, not just the main social network, to fuel growth.

For Q2, Facebook's daily active users increased 11% year-over-year, to 1.47 billion on average during the month of June.

Facebook shares fell as much as 24 percent in after-hours trading Wednesday after sales growth didn't meet expectations - and the social media giant said it would continue to decelerate.

More disconcertingly for analysts and investors, though, company officials warned on the call that its annual growth rate would decline by the high single digits, percentage wise, in the second half of the year.

The complaint filed by shareholder James Kacouris in Manhattan federal court accused Facebook, Mr Zuckerberg and chief financial officer David Wehner of making misleading statements about or failing to disclose slowing revenue growth, falling operating margins, and declines in active users.

Word of some stockholder rebellion comes after Facebook suffered the largest one-day loss in US market history, according to CBS News, with Facebook shares plunging $41.24 - almost 19 percent of their value - to $176.26.

If the losses hold without any recovery in price, this will mean that Facebook will hold the record for the largest single-day drop of any company in stock market history in the United States. "We're starting to see that this quarter", he said.

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The company has faced tremendous scandals from both the Cambridge Analytica debacle and many questions from users about fake news and misinformation.

"Nobody knows where the top is, where that growth slows down", said Phil Bak, CEO of Exponential ETFs and a former managing director of the New York Stock Exchange who said he's been warning investors of a potential sell-off in large tech stocks.

While privacy was an issue in Europe, politics played a role in North America, which is the company's most lucrative advertising market.

Many are pointing the blame at founder and CEO Mark Zuckerberg. "W$3 hile the company is still growing at a fast clip, the days of 30%+ [revenue] growth are numbered", he wrote. "Looking beyond 2018, we anticipate that total expense growth will exceed revenue growth in 2019".

Ben Bajarin, an analyst at Creative Strategies, calls this "new territory" for Facebook.

Before the results were announced, Facebook's shares had closed in NY at $217.50, a record high, and had gained 23% this year. "I just don't think that it is the right thing to say, 'We're going to take someone off the platform if they get things wrong, even multiple times'".

Zuckerberg even noted during a call with analysts that "we're investing so much in security that it will significantly impact our profitability".

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