For Facebook, the fake news, privacy violations, and stolen data came home to roost Wednesday night.
In a conference call after the market closed, the company said it expected revenue growth—Facebook’s be-all and end-all—to actually decrease in the second half of the year.
And not by a little. Chief Financial Officer David Wehner told analysts revenue growth would decelerate “by high-single-digit percentages from prior quarters” in the third and fourth quarters.
That doesn’t mean revenue is going to decline, just that its growth will fall by 7-9% each quarter, a substantial drop. The number of U.S. Facebook users has remained steady, a sign of maturity here.
Starting Wednesday evening, Wall Street went nuts. By Thursday’s close, the stock had fallen almost 19%, erasing $120 billion in market capitalization, the biggest one-day decline for a single stock ever.
The Nasdaq Composite lost 1% on the day and the S&P 500 fell by 0.3%, but the Dow Jones Industrial Average, which doesn’t include Facebook or the other FAANG stocks (Apple, Amazon, Netflix, or Google’s parent Alphabet), actually posted its third straight gain, closing at its highest level since late February.
On Friday morning the Nasdaq fell again, thanks to Twitter’s 16% share price slide.
So, what does Facebook’s fall mean to the other FAANGs and the market as a whole?