After the biggest stock market sell-off in history, what’s next for Facebook?
Social media giant posts big profit, but other numbers show potential long-term problems
Pete Evans · CBC News · Posted: Jul 28, 2018 4:00 AM ET | Last Updated: July 28
Facebook still earns massive profits, but the company learned a harsh lesson this week about managing investor expectations.
When Facebook posted its quarterly results on Wednesday, the stock market sell-off that followed was dramatic.
By the time the market closed the next day, the company had lost $100 billion in shareholder value.
It was the biggest sell-off in Wall Street history.
A market meltdown like that inevitably left the company’s investors wondering “What’s next for Facebook?”
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After all, it wasn’t a set of ugly numbers that sent investors to the exit. The company still made gobs of money — more than $5 billion in profit, in fact. But the sell-off was sparked by fears that the endless growth may soon come to an end.
To Ramona Pringle, a CBC columnist and media professor at Ryerson University in Toronto, the company’s main problem is the same one that has felled many of its technological ancestors — you’re cool, until you’re not.
And to young people at least, the world’s biggest social media company is decidedly not.
“Talk to anyone under 22,” she says, “and they’re not on Facebook.”
FINISH READING: After the biggest stock market sell-off in history, what’s next for Facebook? | CBC