Facebook’s Record Selloff Drags Down Other Tech Stocks
(Bloomberg) -- A record selloff in Facebook Inc. shares spread to other technology stocks after the social media giant missed revenue estimates and warned that sales growth would continue to slow.
An exchange-traded fund tied to the Nasdaq 100 fell as much as 2.3 percent in extended trading before paring some of the losses. Netflix Inc. shed as much as 3.6 percent, while Alphabet Inc. slumped 2.4 percent. Twitter Inc., which reports earnings on Friday, fell as much as 6.5 percent.
Most of Wall Street expected Facebook to show little signs of the turmoil the company had faced from public scrutiny over privacy issues in the second quarter. Of the 48 analysts covering the company, only two recommended selling the stock ahead of the earnings report, according to data compiled by Bloomberg.
Facebook’s selloff in extended trading on Wednesday, which settled at 20 percent, would be the biggest drop ever on a closing basis if sustained Thursday. The Menlo Park, California-based company’s market capitalization is on track to drop by about $126 billion, more than three times the value of Ford Motor Co.
Amazon.com Inc. is the last major technology stock to report earnings this week with its release scheduled Thursday after the market closes. Apple Inc. reports July 31.
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