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Looking at the bigger picture of Facebook’s stock plunge

Marking one of the “worst single-day losses in history” was Facebook’s stock dive on Thursday.

Shares fell 19 per cent, eliminating just under $120 billion of shareholder wealth. Founder and CEO Mark Zuckerberg reportedly lost $15 billion in less than a day, per the Facebook shares he owns.

What does the fall of this tech giant, in all sense of the term, mean for investors?

“The 19% plunge reflects the fragility of the tech sector as a whole,” writes Felix Salmon in Axios. “And it’s all the proof you need that tech investors have moved from greed to fear.”

Q2 2018 showed a very slow growing revenue, the “slowest pace in almost three years,” according to Reuters.

“Facebook’s stumble suggests that some of these stocks — as well as the broader market — could be particularly vulnerable if their financial results don’t live up to investor expectations,” writes Matt Phillips in The New York Times.

Looking forward, and what this sharp drop means for the company, some are reminded of what happened just following the Cambridge Analytica disaster, when shares dropped almost 18 per cent in the 10 days after the news broke. By May, it looked as if the company had recovered.

“But given the vast market value of today’s tech giants, and the fact that 20 percent declines in share prices are not unheard-of, the size of the losses shouldn’t be surprising,” writes Phillips, mentioning that even after the drop Facebook is the fifth-largest publicly traded company.

Read More: Facebook sees shares tumble, but does the future look bright?

The drop Facebook experienced Thursday is significant, but as Los Angeles Times national correspondent Matt Pearce pointed out on Twitter, it’s all about scale.

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