Facebook Shareholders Sue Company as Stocks Tumble

Facebook Shareholders Sue Company as Stocks Tumble

It's official. Facebook Inc. just had the biggest stock-market wipeout in American history. Facebook CFO, David Wehner commented on the issue, saying: "Our total revenue growth rates will continue to decelerate in the second half of 2018, and we expect our revenue growth rates to decline by high-single-digit percentages from prior quarters sequentially in both Q3 and Q4".

Mr Kacouris said the marketplace was "shocked" when "the truth" began to emerge on Wednesday from the Menlo Park, California-based company. He said the 19 percent plunge in Facebook shares the next day stemmed from federal securities law violations by the defendants. Investors also appear to have been alarmed by an alert from Facebook executives that revenue growth would slow as the company refocuses on improving user privacy.

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.

Facebook founder, chairman and CEO Mark Zuckerberg, who has started feeling the pressure with lawsuits being filed against him, is also being asked to quit the top post by shareholders.

Yet the decline merely returned Facebook shares to a level last seen in early May. Furthermore, the growth in the number of daily average users is slowing down as well. According to a report by Bloomberg, the 24 percent drop in Facebook's share valuation in after-hours trading is likely to be replicated in the normal trading session, which will cause Facebook's market capitalization to take a massive hit.

Facebook's legal storm seems endless, considering it has already faced dozens of lawsuits following its mishandling of user data. This was due to issues involving fake news, trolls, and even Russian manipulators.

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