Facebook Inc and its chief executive Mark Zuckerberg have been sued in what could be the first of many lawsuits over a disappointing earnings announcement by the social media company that wiped out about US$120 billion (S$163.4 billion) of shareholder wealth.
The plaintiff, James Kacouris, filed the lawsuit Friday seeking class action status and to recover damages. But investors were concerned about possible revenue decline.
Facebook has faced dozens of lawsuits over its handling of user data in a scandal also concerning the United Kingdom firm Cambridge Analytica.
Both the slower growth forecast and heavier spending reflect problems largely of Facebook's own making. The introduction of the General Data Protection Regulation in Europe cost the company 1 million users after it rolled out, Facebook said. Many have been consolidated in the federal court in San Francisco.
This allowed Buffer to rank third among the world's billionaires, while Zuckerberg ends up in the sixth spot.
Facebook founder, chairman and CEO Mark Zuckerberg, who has started feeling the pressure with lawsuits being filed against him, is also being asked to quit the top post by shareholders.
The fall came after the social media giant revealed three million European users had closed their accounts since the Cambridge Analytica data scandal. The earnings report released by the company stated that the management expects the revenue growth to slow down significantly in Q3 and Q4.
Shares in Alphabet closed up 0.7%, while those in Apple fell 0.3% and Netflix closed barely higher.
Facebook's shares were worth $629.6 billion Wednesday, but, by Thursday, were worth only $506.2, according to Tech Crunch.