Facebook's earnings disaster erased $120 billion in market value -- the biggest wipeout in US stock-market history

  • Facebook's stock tanked after a disappointing second-quarter earnings report that saw the company miss revenue expectations and warn of slowing growth ahead.

  • Shares traded 19% lower on Thursday, wiping out $120 billion in market value. It marked the biggest single-day drop in US stock-market history.

  • Follow Facebook's stock price in real time here.

Facebook just made the wrong type of history.

The Mark Zuckerberg-led social-media titan saw shares drop 19 percent on Thursday following a disastrous second-quarter earnings report. The damage was swift and unforgiving in after-market trading on Wednesday as Facebook plummeted as much as 24% within an hour. The selling then spilled over into regular trading.

Investors took issue with sales and subscriber numbers that fell short of expectations. But perhaps most damaging of all, the company warned of a growth slowdown. Facebook's loss was the biggest single-day drop since it started trading publicly in May 2012.

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But that still undersells the magnitude of Facebook's earnings disaster. On a market-capitalization basis, the company saw $120 billion erased, the biggest in US stock-market history.

And as you can see in the chart, it's not particularly close.

It must be noted, however, that for a loss of this magnitude to be possible in the first place, a company must be gigantic. Facebook achieved its $630 billion valuation (now $510 billion) through an eye-popping 472 percent run-up in its stock price since going public. That it's seeing such a big chunk erased shows just how fickle investors can be about companies that already possess such stretched valuations.

Speaking of market-leading tech stocks, Facebook's mega-cap counterparts Apple, Amazon, Netflix, and Alphabet all lost more than 1.5 percent at their overnight lows, and the Nasdaq 100 index dropped 1.4 percent in regular trading hours.

While analysts were stunned by Facebook's growth guidance and subsequent stock plunge, Business Insider's Jim Edwards pointed out that Zuckerberg warned three months ago that bad news was coming, and no one listened.

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