The stock market is sensational
The share price of any company is – among other things – directly proportional to its actions and statements. Large investors, in particular, watch their “horses” very closely, and their satisfaction or possible displeasure becomes apparent almost immediately. This is precisely due to the fact that investors have a very large influence on changing the stock value of the company in question.
This is exactly what happened to Facebook, or rather to Mark Zuckerberger, who has put a significant portion of his wealth into Facebook stock. That the fatal drop in stock value occurred after the stock market closed is not irrelevant to the interest. From this perspective, it is a fairly important indicator that can suggest much about future developments.
What happened?
The sharp drop in the stock price occurred on July 26, shortly after Facebook released its financial results for the past three months. In the wake of this “expose” scandal, Facebook not only saw an influx of new registered users, but also, of course, profits as a result.
Costs essentially doubled, reaching $7.4 billion. The demand for increased security of user data proved to be a major problem and not one that could be completely “solved on the cheap.” Meanwhile, net income was $5.1 billion (up 42% from the previous year). This does not look like a loss at all, but it is the most disastrous result in years.
How much did it cost?
According to reputable foreign institutions, it was indeed a steep, steep decline. In just two hours, the value of the stock reportedly dropped $18.8 billion to $63.6 billion. Some media outlets are calling this the biggest plunge in stock trading history. The “value taken” here is precisely the distrust shown in Facebook and its business strategy.
Zuckerberg himself has tried to shed light on the situation, saying that his company\’s strategy is focused on returns over a long time frame of several years, but even here it is reasonable to assume that the cost of security and user safety in general is more likely to rise.
What\’s next?
It is fair to say that Facebook is encountering another black dream that will have a painful impact on the value of its stock and, by extension, its brand. Given the likely decline in profits from advertising targeted at its own users, one can surmise that the road back to the top is probably not lined with beds of roses. At this point, we can only speculate as to what magic the company will try to turn this around.