According to the latest reports, a few days after recording a declining value of about $120 billion in market value over slow growth, the social network giant Facebook was sued by one of its shareholders.
Facebook Is Sued After Losing $120 Billion In Market Value
A few days after recording a declining value of about $120 billion, the social network giant Facebook was sued by one of its shareholders. The company, of course, the social network giant Facebook is accused of making misleading claims about its numbers.
The lawsuit was filed on Friday (27) by shareholder James Kacouris. He says that the social network giant Facebook has not anticipated the possibility of revenue growth at lower levels, further declines in profit margins and the number of active users in some markets.
The action also involves personally CEO and founder of the social network giant Facebook, of course, Mark Zuckerberg, and chief financial officer, David Wehner.
According to Kacouris, the market was “shocked” when receiving the company numbers on Wednesday (25). The allegation is that the 19% drop in stock value on a day – the largest ever recorded on Wall Street – was caused by “unlawful acts and omissions” of the company, which would have violated US securities laws.
The shareholder expects that the lawsuit will be transformed into a class action lawsuit and demand an indemnity that has not yet been defined.
Last week, in presenting the company’s balance sheet, Zuckerberg said that investments in security would make profits fall. “We’re starting to see this quarter,”, “BUt, we manage this company for the long term, not the next quarter,” he said.
Between April and June, total expenditures grew nearly 50 percent over the same period in 2017, going from $4.9 billion to $7.4 billion. And the trend is that this situation will be maintained in the coming months.
According to the social network giant Facebook, expenses are expected to grow at rates higher than revenues. What still helps the company is the fact that the number of users continues to increase. For the first time in history, 2.5 billion people have used at least one of their services, such as Messenger, WhatsApp, Instagram and Facebook itself.
So, what do you think about this? Simply share all your views and thoughts in the comment section below.
