Thursday's massacre of Facebook shares, which plunged 19 percent in the biggest one-day drop in history, answered one big question. The stock, it turns out, can fall every bit as fast as it rises.
But others await. Is this a temporary setback for the giant social network, or the start of a painful new journey? And does it portend similar trouble for other high-flying tech giants?
The Thursday stock collapse vaporized $119 billion of the company's market value. CEO Mark Zuckerberg saw his net worth fall by roughly $16 billion as a result.
Yet the decline merely returned Facebook shares to a level last seen in early May. At that point, the stock was still recovering from an earlier battering over a major privacy scandal. Investors had been piling into the stock ever since. In fact, on Wednesday the shares hit a new record high before retreating.
Late Wednesday, Facebook warned that its revenue growth will slow down significantly for at least the remainder of the year and that expenses will continue to skyrocket.
The earnings covered the company's first full quarter since the Cambridge Analytica privacy scandal erupted. But analysts attributed the user growth shortfall largely to European privacy rules that went into effect in May, not to the furor over the political consulting firm with ties to President Trump, which improperly accessed the data of tens millions of Facebook users.
Facebook continues to grapple with big existential questions, ranging from its users' privacy to tech addiction to how it deals with fake news and misinformation, hate speech, and extremism on its service.
Both the slower growth forecast and heavier spending reflect problems largely of Facebook's own making.
New European privacy rules, inspired in part by Facebook's relentless mining of its own users' data, are starting to hamper the company's advertising business. And the increased spending aims, among other things, to prevent a replay of the fake news and propaganda that Russian agents unleashed on an unguarded Facebook in an attempt to sway the 2016 presidential election.
Mr. Zuckerberg even noted during a call with analysts that "we're investing so much in security that it will significantly impact our profitability."
Overall, technology giants – Facebook, Apple, Google, Amazon, and others – have enjoyed almost unprecedented growth in revenue and stock price for years. They have seemed unstoppable, even in the face of regulatory pressure, user dissatisfaction, and broader existential questions about their impact on society. Technology companies account for six of the 10 biggest companies in the S&P 500 Index.
Some see the Facebook selloff as clear evidence that nothing can grow forever, especially not the world's biggest companies, especially not at the rate of nimble, promising startups. Facebook revenue is still growing at a rate double that of Twitter. A decade ago, almost no one could have imagined that Facebook would have more than 2 billion users, much less that its family of apps – Instagram, WhatsApp, and Messenger – would also count members in the billions.
"Nobody knows where the top is, where that growth slows down," said Phil Bak, CEO of Exponential ETFs and a former managing director of the New York Stock Exchange who said he's been warning investors of a potential sell-off in large tech stocks.
Things could get rougher still. Those European privacy regulations, known as the General Data Privacy Regulation, or GDPR, went into effect with just one month left in the second quarter. That means Facebook could feel its effects more strongly later this year.
For more than a year – ever since Zuckerberg published a 5,000 word manifesto arguing that Facebook needs to make the world a better place by bolstering civic engagement and addressing social ills – the company has seemed torn between its philosophical mission and its economic one. Wednesday may have been the first time this tension really broke into the open, probably because it threatened the one thing all investors care about: money.
Michael Connor, whose Open Mic group helps investors push tech companies to address privacy, abuse, and other issues, said it's "far too early" to see if Facebook's efforts to improve itself will prove fruitful. But the real question, he said, is whether the company can "continue to do what they are doing in the face of criticism from Wall Street."
Siva Vaidhyanathan, a media studies professor at the University of Virginia and author of the new book, "Antisocial Media: How Facebook Disconnects Us and Undermines Democracy," dismissed the significance of the stock plunge.
"Mark Zuckerberg isn't panicking," he said. "The Facebook board isn't panicking. Most of its large institutional investors aren't panicking. They know they're in it for the long game."
This story was reported by The Associated Press.