Did the Facebook outage alone cause Zuck's USD 6 billion drop?
Current Affairs
On Monday at around 9 PM IST, a global outage led to Facebook, Instagram and WhatsApp being down for nearly 6 hours.
The frenzy over the outage was noticed not just on Twitter, but also on NASDAQ. Facebook’s share price fell by ~5%, extending the overall September drop to ~15%.
However, Facebook wasn’t alone!
Larger technology stocks sell out
Not just Facebook, but all major technology stocks like - Apple, Nvidia, Amazon and Microsoft, closed at a low on Monday. The technology-focused ‘Nasdaq Composite’ dipped by ~2.1%.
Why?
The underlying story is - These tech stocks are facing pressure due to rising US bond yields. This has raised concerns about inflation, and investors are speculating the Federal reserve to start changing its current accommodative monetary policy sooner than expected.
How much did Facebook lose?
As per estimates, Facebook lost around USD 545,000 per hour of ad revenue during the outage.
While the direct revenue impact to Facebook might be limited to USD 3.27 million during yesterday’s outage, the fall in share price yesterday alone has led to Zuckerberg losing more than USD 6 billion.
However, between September 13, 2021 and yesterday, Zuckerberg’s net worth has seen a fall of USD 19 billion in entirety.
“The Facebook Files”
Facebook’s stock has been plummeting since mid-September when the Wall Street Journal released an investigation series called “The Facebook Files”.
Based on the review of Facebook’s internal documents - including research reports, online employee discussions, and presentation drafts to senior management, the series reveals how Facebook knows, in acute detail, the flaws of its platform and the harm it is causing currently, and can potentially cause.
More on the outage
The 6 hours of global outage, probably the longest so far, was due to a “faulty configuration change”, which also impacted Facebook’s internal tools and systems. The internal impact also complicated the diagnosis and resolution attempts.
“It was as if someone had pulled the cables from their data centers all at once and disconnected them from the Internet” stated two senior Engineers at Cloudflare.
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