A profit and growth warning prompted investors to dump Facebook shares as the company said it would have to deploy additional resources to take care of user privacy concerns even as user addition on its platform slowed. The stock recorded its sharpest fall ever shedding 19 percent or $119 billion in market capitalisation in one trading session.
The decline comes in the wake of the Cambridge Analytica scandal where data of millions of users was compromised. The social media giant has since said it would offer users greater privacy tools. The growth in daily active users also slowed from 3.42 percent in Q1 to 1.44 percent in Q2. Despite the plunge, the company trades at 27 times 12 month forward earnings—a large premium over the 21 times that the Nasdaq trades. The stock ended the Friday trading session down 0.78 percent at $174.89.