Facebook hit with class-action suits following stock tumble

Facebook co-founder and chief executive Mark Zuckerberg took a major hit too. He lost $16.8 billion in extended trading

FB stock was down about 7.8% after the bell on Wednesday following the news, while shares were up roughly 1.3% during regular trading hours. Facebook's market cap was $629 billion at market close Wednesday, and ended the day Thursday at around $510 billion.

The fallout comes after the company's announcement that growth might slow after "an avalanche of scandals involving misinformation and data misuse". Shares of Facebook fell 17 per cent in the days after news broke.

"Founder and CEO Mark Zuckerberg has said that he has no intention of letting Facebook become a platform known for celebrating humanity's worst impulses". He lost $16.8 billion in extended trading.

The stock value drop amounted to a $119-billion loss. "There are always going to be these one-day disasters".

But amid every controversy, Facebook - the public company and business - seemed unscathed.

Facebook's Seattle engineering center.

The problem: weaker-than-expected revenue growth, Facebook's first such miss since 2015.

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According to the research firm, Facebook-owned Instagram is making up for some of the slowdown in growth at social network and will generate $8.06 billion in worldwide ad revenue this year.

Despite the record stock price tumble, the tech giant still made $13.2 billion (€11.3 billion) in the second quarter of 2018, a year-on-year rise of over 40 percent.

According to techcrunch.com, it seems as if Facebook announced the stat in hopes of deflecting attention from the fact that its user count shrank in Europe and was flat in the USA and Canada, contributing to extraordinarily low monthly and daily user growth. The Observer revealed that data from millions of Facebook users had been inappropriately passed on to the political consultancy, which wanted to influence voters. Without knowledge on what demographic the three million European users who abandoned the service fit into, it's hard to know just how easy it'll be for Facebook to win them back. Controversies came and went, but nothing stuck. And it seemed Facebook would shrug off the recent rash of scandals, too - Russian election interference, the mishandling of as many as 87 million people's personal information by Cambridge Analytica and the unchecked spread of fabricated news.

Until now, he said, there was a sense that the vast majority of users didn't fully understand Facebook's business.

In an understandable development at the announcement, Facebook's stock has taken a tremendous nosedive, down almost 20% at peak.

Normally, a drop that steep in a company so high profile would bring out bargain hunters, investors who see the opportunity for a quick profit in a popular stock.

Caty Weaver wrote this story.

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