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Facebook shares in free fall, plunging 21 per cent as weak outlook stuns market

The huge drop will have wiped out US$130 billion in market value, if the slump is confirmed in Thursday’s market opening

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Facebook shares dropped some 21 per cent in after-hours trade, on the back of a weak second-quarter outlook. Photo: Reutersile photo

Facebook shares went into a free fall Wednesday as a stunningly weak financial outlook raised fresh concerns for the social networking giant as it tries to recover from the impact of data protection scandals and investigations.

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After-hours trade saw Facebook shares plunge by some 21 per cent, wiping out an estimated US$130 billion in market value if the slump is confirmed at Thursday’s market opening.

The second-quarter report sparked initial selling after it showed revenue and user growth came up short of expectations.

Profit was up 31 per cent in the second quarter at US$5.1 billion; revenues rose 42 per cent to US$13.2 billion, slightly below most forecasts.
In this May 1 file photo, Facebook CEO Mark Zuckerberg makes the keynote address at F8, Facebook's developer conference in San Jose. Photo: AP
In this May 1 file photo, Facebook CEO Mark Zuckerberg makes the keynote address at F8, Facebook's developer conference in San Jose. Photo: AP
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Selling pressure accelerated when chief financial officer David Wehner warned in a call with analysts of a weaker outlook in the coming quarter.

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