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Why Facebook Stock Fell Monday

By Daniel Sparks - Mar 9, 2020 at 2:07PM

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The social network's stock fell along with the broader market.

What happened

Shares of social network Facebook (META -0.48%) took a hit on Monday, falling as much as 8.8%. As of 1:56 p.m. EDT, however, the stock was down 6%.

The stock's decline on Monday was likely primarily driven by a sharp decline in the overall market as investors worried about the continued spread of the COVID-19 coronavirus and an oil price war launched by Saudi Arabia.

Facebook CEO Mark Zuckerberg

Image source: Facebook.

Now what

Highlighting the sharp drop in the overall stock market on Monday, the S&P 500 was down 6.9% as of 1:56 p.m. EDT. Facebook's pullback on Monday, therefore, was about in line with the market's sell-off.

Some Facebook investors might be worried that the tech company could see weaker-than-expected demand for its advertising products during Q1 amid uncertainty about the global economy.

Now what

When Facebook reported its fourth-quarter results in January, the social network guided for first-quarter revenue to grow at a year-over-year rate of about 20% to 24%. While this is notable growth, it would be down from 25% growth in Q4.

Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool's board of directors. Daniel Sparks has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Facebook. The Motley Fool has a disclosure policy.

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