Facebook Stock Suffers Biggest Drop Of 2019, Loses $37B In 4 Trading Days

Facebook stock had its worst day so far this year Monday and it looks like this is just the beginning of a lot more worse days to follow.

Facebook shares extended their losses Monday after being hit by a downgrade from analysts at Needham. It closed 3.3 percent lower, extending last week’s massive losses. The stock plunged 2.5 percent on Friday and is down more than 13.3 percent over the past year.

Facebook saw its stock sink for the fourth straight day on Monday, falling another 3.5% to close at $160.47 a share. Last Wednesday (March 13), Facebook closed at $173.37, its highest level since August 2018, said Yahoo Finance.

An unending tsunami of bad news, however, has since sent its stock falling to 7.4% in the past four trading days. This plunge is equivalent to a loss of nearly $37 billion in market value.

Facebook shares are tanking in the wake of recent executive resignations and the prospect of a far weaker management team that has to cope with the multitude of scandals besetting the company. The fear among analysts now is that more executives are set to leave following the departure of Chris Cox, the company’s Chief Product Officer and number two employee, who resigned last week.

Chris Daniels, Vice-President of WhatsApp, has also left the company. CEO Mark Zuckerberg announced the departures of Cox and Daniels after telling Facebook staff about a major change in company strategy. Part of this revamp will be major changes in the senior leadership.

Analysts noted the loss of Cox and Daniels comes after the departure of other high-ranking executives. Among these are Facebook’s chief security officer Alex Stamos, its top policy and communications exec Elliot Schrage, both founders of Instagram Kevin Systrom and Mike Krieger, and the CEO of WhatsApp Jan Koum.

The stream of executive departures comes amid a painful two year period where Facebook has been vilified for abusing user privacy, and summoned to testify about its apparent inaction in taking down fake news, extremist news and political trolls, especially those from Russia.

Analysts surmise Facebook’s move towards private and encrypted communication has left investors concerned about how its hugely profitable targeted advertising products will make money if users don’t post publicly.

Then there’s the fallout from last week’s New Zealand massacre where the gunman livestreamed on Facebook a 17 minute-long video of his killings. The gunman, an Australian racist, murdered 50 innocent Muslims and wounded 50 other people.

The shooting was initially streamed through Facebook’s live feature. Copies of the video were then spread throughout social media by other users. One of these copies was even shown by Turkish president Recep Tayyip Erdogan to inflame his audience in a fiery speech blasting Islamophobia in the West.

Facebook said Saturday videos of the shooting were uploaded 1.5 million times. It claims it removed most of these sickening videos before they could spread further.