On Monday, Facebook’s market capitalization plummeted by $60 billion in a single day. The FB stock had closed Friday with a market cap of about $966 billion, while on Monday it hit a low of $909 billion.
Facebook’s stock market crash after the global outage
During the course of yesterday’s trading day, it recovered its losses, closing at $938 billion, which is still $28 billion less than Friday’s close.
It is worth noting that Facebook’s stock price had already been falling since 13 September, as it had already lost more than 12% cumulatively in about three weeks since the 10 September close.
It had previously hit an all-time high on 1 September, and the current level is still only 13% lower than the ATH, and 21% higher than at the start of the year.
The losses are undoubtedly also due to the widespread blackout that shut down all its services for almost seven hours, but there are also many other reasons. It is worth noting that Monday was not the only US technology stock to lose, with Twitter, for example, losing even more proportionately.
As a result of these falls, Mark Zuckerberg’s personal wealth fell by a staggering $121 billion, according to the Bloomberg Billionaires Index, dropping him to fifth place behind Bill Gates.
The ranking sees the rise of Musk and Amazon shares over Facebook
Elon Musk is back at the top of the list, having once again overtaken Jeff Bezos, partly due to heavy losses for Amazon stock.
Compared to Friday’s close, Amazon is now down almost 2%, while compared to July’s ATH it is down more than 14%, while Tesla is up 0.7% compared to Friday’s close.
Facebook’s problems aren’t over, though, as the revelations of whistleblower Frances Haugen are casting serious doubt on its credibility.
Monday’s technical problem, when Facebook, Instagram, WhatsApp and Messenger went offline for several hours due to a server misconfiguration, seems to have been completely resolved. However, the very fact that such a company could implode in this way due to a trivial internal error suggests that there could be more similar problems in the future.
In addition, former employee Frances Haugen has revealed that she was the source of the Wall Street Journal reports published in recent weeks. This information is casting serious doubt on the company’s ability to deal with dubious, even fraudulent, behaviour by many of its users.
The prospects for the company’s short- and medium-term future do not appear to be good, but Facebook has already demonstrated over time that it is capable of dealing with situations even worse than this.