Facebook made history with having the biggest stock-market wipeout in American history, with their shares plummeting 20 per cent of their value on Thursday, translating to about a 124 billion dollar decline in market capitalisation.
The collapse came after 16 brokerages cut their estimated price targets on Facebook, after the Chief Financial Officer David Wehner startled analysts by saying that Facebook is expected to suffer long-term profit margin reduction.
Facebookâs profit margin fell to 44 per cent in the second quarter from 47 per cent a year ago as the company focussed more spending than ever on security initiatives to convince users the company was protecting their privacy.
Chief Executive Officer Mark Zuckerberg's fortune took a 16 billion dollar hit with the company.