Facebook was harshly punished this week over its privacy loopholes, which were tolerated for many years, as the firm’s market value dropped more than $100 billion on Thursday July 27th.
According to the Washington Post, the dramatic collapse is the largest single-day drop in value in Wall Street history.
The crisis Facebook is facing is thought to be a result of various factors, such as the rising costs of privacy regulations and controversies along with declining growth in users and revenue.
The firm’s stock dropped down 19% on July 27th, its lowest level in nearly three months. This comes amid worries that investors are reconsidering the viability of Facebook’s core business based on collecting extensive data on users so that they can better target them with advertising. The business of targeted advertising is being criticised more and more over abuse of privacy of social media users.
Back in May, the European Union implemented the new data protection rules, under the General Data Protection Regulation. Meanwhile, US officials have started examining Facebook in multi-agency federal investigation related to its handling of the data scandal involving the political consultancy Cambridge Analytica that improperly accessed information from 87 million people.