(Bloomberg) -- People have complained for a while now that Facebook Inc. is too big. Well, good news: It just got 20 percent less big in a hurry.
Facebook’s market valuation collapsed by about $120 billion today – roughly the equivalent of a General Electric Co. or a 3M Co. – personally costing Mark Zuckerberg $15 billion in just the first few minutes of trading. He will now be forced to carry on with just $71 billion. Thoughts and prayers.
Driving all this pain was an earnings report Shira Ovide describes as “utter disaster for investors.” The raw numbers – 42 percent revenue growth, 2.5 billion global users – don’t sound disastrous. But growth rates have slowed dramatically:
Investors had gotten used to the idea of Facebook growing to the sky forever. And those days appear to suddenly be over, Shira writes.
Of course, Facebook is still growing and still worth more than $500 billion. Matt Levine suggests being able to lose a record $120 billion in one day “is a more impressive financial accomplishment than anything that almost any other company has done in the history of stock markets.”
And maybe investors shouldn’t have been so surprised. Facebook has been under relentless fire for a host of sins, including its use of private data and its inability/unwillingness to police toxic content. It has warned investors it will spend a lot of money to address some of those problems.
But Shira, in a second column, suggests even Facebook wasn’t quite aware of how revenue, profitability and user growth would all come to a screeching slowdown at once. Maybe that #DeleteFacebook movement wasn't such a joke after all.
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