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.”