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OFF-TOPIC Facebook loses $120 billion (market cap) in a day

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Fox

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Biggest loss in a companies value in one day ever...

Facebook stock drops 19%, loses $120 billion in value after warning that revenue growth will take a hit

The social-media behemoth’s stock lost roughly one-fifth of its value in the extended session Wednesday. The stock dropped about 7% immediately after the earnings report was released, then plummeted to a loss of more than 20% as a conference call with analysts progressed. Close to 34 million shares changed hands in Wednesday’s extended session, well above the average volume of 17 million shares for a regular trading session over the past month.

Facebook stock had recovered from a decline earlier this year in the wake of the Cambridge Analytica scandal, one of several controversies and warning signs that the company had managed to weather with little damage to its stock. But declining revenue and user growth, topped by a warning from executives that it will continue, seemed to end that run.
Yikes.
 

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kelvinfernandezm

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I deleted my Facebook a few days ago. Never going back to it. Reasons why? Because I can't stand online "friendships" anymore. People act differently online than in person. I had over 500 "friends" but only one or two bothered to message me. Also because since the 2016 election Facebook became too polarized.

I took a break from other online social media because they are literally made for you to become addicted to them.

Facebook won't recover from this. And hopefully it'll go the way of friendster and Myspace.
 

Andy Black

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I like catching up with long lost friends on Facebook. That part is pretty amazing.

Facebook groups are totally amazing. Drop in and read what everyone's complaining about. A business owner's dream.

Other than that, I don't like Facebook's goal to keep people on the platform all day long. They want people addicted to it, turned into zombies, and they want to stop people from going about their day.

I much prefer Google's business model where their goal is to provide you with the most relevant results as quickly as possible so you leave and get on with your day. Google makes money because we go there many times a day to find things, and they make money when we leave their platform.


EDIT: Also... I've been seeing front-page articles in national newspapers in Ireland warning of the damage Facebook is doing to our youngsters. Not something I've ever seen about Google (Alphabet)...
 
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MJ DeMarco

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Deceleration of user growth, loss of users in the EU, accelerating expenses.

I won't even get started on their throttling of specific accounts that don't pass their Ministry of Information czars.

F*ck Facebook. Hope they go way of MySpace. (But only after my short puts expire, lol.)

They'll be fine.
As much as I hate to admit it, I'm sure they will. So much so I wrote options on it.
 

Maxboost

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I met an investment banker on vacation who made a lot of money on the stock market. He told me to never invest in the market as it's all a scam unless you have insider knowledge. He admitted that he made a small fortune from his rich father's friend.

With Zuckerberg unloading his stock since a year ago, and now with all of this dumping, is there something more to this that we don't know about?

I'm calling it now, the SEC will be prosecuting someone over this. Something fishy is going on...
 

404profound

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Facebook had two options; continue to figure out how to enrich user experience, or continue to figure out how to more efficiently sap users of their time and money. They went the latter route, and it will be their undoing. The increased prevalence of invasive advertising and the stagnation of social engagement modes will result in them being an ad platform with an exponentially waning audience.
 

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With Zuckerberg unloading his stock since a year ago, and now with all of this dumping, is there something more to this that we don't know about?
C suites and other investors sell all the time, whether they think the price will go up or down.

It's relevant when the stock takes a dive, and the execs start buying it all up. Only reason they'd do that is if they think the stock will go back up. (except Sears that is lol. RIP)

The "dumping" is due to missed numbers and terrible projections. Nothing to see here, just your regular earning season.

So that's it, pack up boys, FB has peaked. Everyone out!

(Oculus and their internet satellites may save them, but it's gonna be nasty over the next year or so)
 

MJ DeMarco

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Oculus and their internet satellites may save them
Agreed, this is where the growth will have to happen.

I don't see many people who haven't joined Facebook in 10 years suddenly saying "OMG, it's about time I joined." Their business model right now is maximization of revenue per user, as I wrote in Unscripted, squeezing the towel, more profit, more cost to end users, less value.

This is why my FB page with 150,000 likes gets 200 views on every post, but I'm damn sure I'll get emailed 3 times to "promote your post for only $5!"

Sorry Zuck, squeeze another towel.
 

StayHeady

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So based on all of the information that we have at the moment do yall see any way to potentially leverage an opportunity out of this situation? This might be a dumb question. Im just trying to think outside the box here. Whats the silver lining ya know?
 

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Really puts the loss in perspective, holy shnuckers!

upload_2018-7-26_18-13-35.png

that we have at the moment do yall see any way to potentially leverage an opportunity out of this situation?
The selling seemed like an over-reaction to me, which is why I sold put spreads on the drop as the IV was still very high and the premiums rich.
 

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Xeon

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Facebook won't recover from this. And hopefully it'll go the way of friendster and Myspace.
Hell naw! If FB is dead, how will people like me use it to reach potential customers at an affordable price? FB ads have helped many businesses reach their audience.

Though I admit it's irritating to see people posting their travel pics for the 3rd time a month (don't they have to work? Maybe they have lots of FU money), and posting pics of their kids (sorry but I don't think your kid is the least bit cute).
 

Bulgano

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Really puts the loss in perspective, holy shnuckers!

View attachment 20370



The selling seemed like an over-reaction to me, which is why I sold put spreads on the drop as the IV was still very high and the premiums rich.
Makes you wonder why we give someone who referred to his users as “Dumb F*cks” for using his service this much power. I mean, I'm not saying Costco treat their customers perfectly, but you always get a good greeting at the door and when you leave, regardless of if you bought something or not...
 

kelvinfernandezm

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Hell naw! If FB is dead, how will people like me use it to reach potential customers at an affordable price? FB ads have helped many businesses reach their audience.

Though I admit it's irritating to see people posting their travel pics for the 3rd time a month (don't they have to work? Maybe they have lots of FU money), and posting pics of their kids (sorry but I don't think your kid is the least bit cute).
There will always be a place to reach your audience as long as the internet is around. Myspace had many advertisers then they all moved to facebook. Same with people who used to put up ads on newspapers, tv and radio they all moved online.

If I were you I would start learning how to use instagram and snapchat advertising. Also facebook won't completely die. But it won't be as important as it is today. Many older people use facebook now so the demographic for facebook will be older folks. Just like myspace became a website for musicians.
 

kelvinfernandezm

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Deceleration of user growth, loss of users in the EU, accelerating expenses.

I won't even get started on their throttling of specific accounts that don't pass their Ministry of Information czars.

F*ck Facebook. Hope they go way of MySpace. (But only after my short puts expire, lol.)



As much as I hate to admit it, I'm sure they will. So much so I wrote options on it.
Yeah the censorship was off the charts right after the elections. All it took for you to get banned was for one SJW to flag your post and boom locked out for 30 days. Also everytime I posted something I had to walk on eggshells so as not to offend anyone. That and having to read how people got fired from their jobs after an angry mob of facebookers descended upon them and ruined their lives for typing a sinful word.

At the end of the day it was just too much work and all the enjoyment was gone. Why would I keep using a product that locks me out everytime it gets offended.
 
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Everyman

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Well it means that's the street on the stock market and we have another dot-com bubble peak (this time it's everything bubble).

Insiders are dumping their stocks (look all FANG, not just FB, Tesla too....).

For a company that made $16B in 2017, market cap is over $500B and P/E over 24... 120B that evaporated never existed.

Look here, page 62:

https://s21.q4cdn.com/399680738/files/doc_financials/annual_reports/FB_AR_2017_FINAL.pdf

They made $24B from operating activities. But purchased net $16B of 'marketable securities'..........

I read that Bezos is the richest man on Earth. $150B. Half of it is in Amazon shares. This is ridiculous. Please ask Jeff to sell $75B worth of shares today for $75B...................

We are going to see more of this in the coming months/years as the valuations don't have any connection to real performance.
 

biophase

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Really puts the loss in perspective, holy shnuckers!

View attachment 20370



The selling seemed like an over-reaction to me, which is why I sold put spreads on the drop as the IV was still very high and the premiums rich.
I bought some this morning.
 

SquatchMan

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I think we're at "peak Facebook."

They have a strong user base in the US, EU, & a mix of random 3rd world countries with super low buying power (ads in Thailand cost like $.01 per click).

They're locked out of China. Russia & Japan have different social networks. No growth in those countries.

Young people aren't using it. About 50% of Americans under 18 don't even use Facebook. 69% have Snapchat; 71% have Instagram.

Compare that to 2015 when 70% of Americans under 18 use Facebook.

Numbers don't look good for future user growth. It seems like they're only option is too maximize revenue and watch the slow death as people leave the platform.
 

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Mattie

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This is why my FB page with 150,000 likes gets 200 views on every post, but I'm damn sure I'll get emailed 3 times to "promote your post for only $5!"
I get this all the time.
 

LleixG

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I think we're at "peak Facebook."

They have a strong user base in the US, EU, & a mix of random 3rd world countries with super low buying power (ads in Thailand cost like $.01 per click).

They're locked out of China. Russia & Japan have different social networks. No growth in those countries.

Young people aren't using it. About 50% of Americans under 18 don't even use Facebook. 69% have Snapchat; 71% have Instagram.

Compare that to 2015 when 70% of Americans under 18 use Facebook.

Numbers don't look good for future user growth. It seems like they're only option is too maximize revenue and watch the slow death as people leave the platform.
Lucky for them they have Instagram (Whatsapp too) and Snapchat is slowly dying. Seems like a good moment to buy some cheap FB, they barely missed the estimates and it goes down 20%? Way oversold imo
 

Roli

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^^^^
What I find amazing about this is that still 'only' accounts for a fifth of their value!!

Other than that, I don't like Facebook's goal to keep people on the platform all day long. They want people addicted to it, turned into zombies, and they want to stop people from going about their day.

Google makes money because we go there many times a day to find things, and they make money when we leave their platform.
^^^^
Ahhh, wise words sensei

-
I left a few months ago rather abruptly. I was having an argument with an idiot, and I remembered the maxim;

if you argue with idiots you
are an idiot.
 

Andy Black

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SquatchMan

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Lucky for them they have Instagram (Whatsapp too) and Snapchat is slowly dying. Seems like a good moment to buy some cheap FB, they barely missed the estimates and it goes down 20%? Way oversold imo
The huge drop was because of what was said on the earnings call. Not because of the numbers.

-Revenue growth drop by a "high single digit" percentage in Q3 and Q4.
-Operating margin will trend downwards from around 50% to somewhere in the mid-30s.

The second one is probably what sent everyone into a panic.
 
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masterneme

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Oculus and their internet satellites may save them
And Instagram and maybe their "dating services".

Facebook has had many missed opportunities that didn't exploit. They could have been the #1 global gaming platform and they could had been competition for Youtube and Twitch.

But they did nothing.

Now if you buy a new Android smartphone you activate your Google account which you can use to sign up to other places, so they're losing the advantage they had with Facebook Connect for 1 click easy account registration.

And with Oculus they're making the mistake of trying to lock users up on their store. They view VR as a new platform instead of as a gadget or peripheral.

This happened when 3D accelerators started to become widespread, every brand had their own 3D API and their own set of SDKs and drivers. It was a mess and it all disappeared when we got OpenGL and DirectX.

The standalone VR headsets will come with Android and overtime I think the Play Store will be accessible from any device even is made by an unknown Chinese company.

And for the Premium PC experience there are many options being Steam the industry leader and go-to place to buy games.

Oculus VR as a platform will make little sense and VR as a device might not make enough money to "save them".
 

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Why do I get the feeling that the next time around facebook will try to put a positive spin on SOMETHING. Or downplay the damage that was done.

It does seem like a good option selling opportunity as IV is probably overstated. But I'm actually thinking about buying some calls it might actually be worth the premium.

I mean the stock is now where it was two months ago.
 
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