Courageous millennial investors are piling into Facebook after its earnings plunge (FB)

  • Courageous millennial investors are piling into Facebook after its earnings plunge (FB)

Courageous millennial investors are piling into Facebook after its earnings plunge (FB)

In this March 29 photo, the logo for Facebook appears on screens at the Nasdaq MarketSite in New York's Times Square.

Shares fell as much as 19.6 percent to $174.78, a decline that if sustained would wipe about $124 billion off the company's value. That is believed to be the largest one-day drop of any company on the American stock market.

According to the research firm eMarketer, Facebook is expected to hold an 18 percent share of the $273.29 billion worldwide digital ad market, behind Google's 31 percent.

As a result of the stock tumble, Facebook CEO Mark Zuckerberg's net worth dropped by more than $16 billion. However, average revenue per user in the region rose despite the lack of growth.

Investors began to panic after the social media company said during an earnings call Wednesday that revenue growth would continue to decelerate for the rest of the year.

After the Cambridge Analytica data scandal, Facebook suspended Boston-based data analytics company Crimson Hexagon over concerns that it harvested users' data.

The company also said revenue growth from emerging markets and the company's Instagram app, which has been less affected by privacy concerns, would not be enough to fix the damage. The company's head count has already risen 47 percent since previous year, to 30,275.

The earnings report follows a tumultuous quarter for Facebook, which has faced questions from Congress and others about handling of misinformation on its site and user privacy.

At times, it has seemed as though Facebook can't quite decide where its values really lie. But as I've said on past calls, we're investing so much in security that it will significantly impact our profitability. Some analysts argue that its long-term outlook is favorable, with RBC Capital Markets' Mark Mahaney writing that the sell-off may represent "one of the best entry points you can get on FB", according to Bloomberg.

Although Facebook's Q2 earnings report showed that it missed earnings and user growth expectations by only slim margins, investors may have been looking for a reason to run. And in the long term, Facebook plans to split the resulting advertising revenue with the content creators.

The drop in European visitors was potentially due to the continuous revelations highlighted there about Facebook's breaches and weaknesses, and the implementation of the European Union and related entities' General Data Protection Regulation (GDPR) in late May.

More likely, though, market buzzards are holding off because of how quickly some analysts are turning on the company.

"Facebook stills owns two of the largest media assets in the world (Facebook and Instagram) and the two largest messaging assets in the world (Messenger and WhatsApp)", Mahaney said in a note to clients, adding that he sees "no material change in marketer views of the attractiveness" of Facebook platforms.