Facebook sued after stock plunge 'shocked' market

Zuckerberg loses $16 bn as Facebook shares plunge after profit warning

Facebook could lose $151 billion in market capitalization today

Thursday's massacre of Facebook shares, which plunged 19 percent in the biggest one-day drop in history, answered one big question.

The stock initially dropped by 9 percent on Wednesday night due to a slow decrease in revenue recently.

Mr Kacouris said the marketplace was "shocked" when "the truth" began to emerge on Wednesday from the Menlo Park, California-based company.

Facebook had the largest-ever loss of value in one day for a U.S. traded company.

Facebook remains a quickly growing company that sees its revenues increase by over 30% yearly, but the news of decelerating growth was enough to discourage some investors.

So far, three class-action suits have been filed by shareholders claiming that Facebook made false and misleading statements to investors including lack of disclosure around monetization associated with Instagram Stories.

A Facebook spokesman declined to comment.

Facebook has faced a series of crises over the past two years, starting with Russian interference on the platform during the 2016 election and continuing with this year's Cambridge Analytica data privacy scandal.

Both the slower growth forecast and heavier spending reflect problems largely of Facebook's own making. Many of those lawsuits have been reportedly consolidated in the federal court in San Francisco.

Thursday's plunge also hit Zuckerberg's bottom-line.

Investors filed at least two proposed securities fraud class actions against Facebook in NY federal court Friday, accusing the company and its top brass of misleading shareholders in the months leading up to its disappointing earnings statement and subsequent $120 billion stock drop.

Zuckerberg reiterated in the earnings call last week that the company's major investments in security will lower its profitability.

The S&P 500 technology index fell 2.0 per cent, the most among the major S&P sectors. The shares closed up 0.5 per cent.

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