Don’t Panic Over Falling Facebook Stocks
Facebook shares fell 19% on Thursday after the company told investors that user growth has slowed in the wake of the Cambridge Analytica hack, one of many scandals currently plaguing the tech giant (it also failed to estimate revenue). That 19 percent drop equates to a $ 119 billion drop in market capitalization, which, according to Bloomberg , is “the biggest loss in value in a single day for an American company.”
If you have influence on Facebook – you can check here to see if you have the funds – you might panic a little.
Just relax. After all, the company was at an all-time high on the Wednesday before its massive drop (The New York Times reports Facebook is up 23% this year) and is still higher than a year ago. The savvy investor is oblivious to the daily movements of the market or individual stocks. A single report of poor earnings does not mean the end of a company.
What do you need to keep in mind? Along with Facebook, several tech companies have accounted for more than half of the S&P 500’s gains this year, according to the NYT. Other tech giants are doing well, with Apple growing 15 percent this year, Alphabet more than 20 percent, and Amazon more than 50 percent.
You can also use the blob as a reminder of variety. Don’t store all your eggs in one basket, or rely too much on one company or sector.
Headlines highlighting the loss of Facebook are attractive, but it’s better to take your time than do something rushed or change your financial plan. Anyway, now is the best time to buy.