Sign up for our daily briefing

Make your busy days simpler with Axios AM/PM. Catch up on what's new and why it matters in just 5 minutes.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Denver news in your inbox

Catch up on the most important stories affecting your hometown with Axios Denver

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Des Moines news in your inbox

Catch up on the most important stories affecting your hometown with Axios Des Moines

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Minneapolis-St. Paul news in your inbox

Catch up on the most important stories affecting your hometown with Axios Twin Cities

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Tampa Bay news in your inbox

Catch up on the most important stories affecting your hometown with Axios Tampa Bay

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Charlotte news in your inbox

Catch up on the most important stories affecting your hometown with Axios Charlotte

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!
Expand chart
Data: Yahoo! Finance; Chart: Axios Visuals

Facebook's $120 billion stock drop — a company's biggest one-day loss of market value in U.S. history — isn't solely about Facebook, Felix Salmon, Slate columnist and "Slate Money" podcaster, writes in a special guest analysis for Axios.

Why it matters: The 19% plunge reflects the fragility of the tech sector as a whole. And it's all the proof you need that tech investors have moved from greed to fear.

Absent the shortfall from what had been promised, the Facebook earnings reported Wednesday evening were objectively excellent, up 32% year-over-year, with revenues up 42% (and up 11% quarter-over-quarter).

  • And while user growth has pretty much flatlined in the mature markets of the U.S. and Europe, it’s been obvious for a while that those regions were running out of new customers.
  • Which means that the panicked aftermarket flight was partly a function of investors taking the excuse to sell near all-time highs. (Although the rest of the tech stocks held their ground: Google nailed its numbers and its stock was rewarded.)

Logic behind the loss:

  • Facebook stock is now back to where it was after the Cambridge Analytica scandal broke, and the negative headlines aren’t going away.
  • The best-case scenario for investors is that Facebook will hurt its earning power by throwing so many workers and so much money at the problem of fake, dangerous, and toxic content that it will go away. That’s going to be a huge ongoing expense.
  • The worst-case scenario is that Europe and other jurisdictions ban all targeted advertising, the Facebook earnings machine.
  • Valuations are stretched across the sector, and shorts, especially in Tesla and Netflix, have already been hurt badly. Short squeezes are great for momentum, but they rarely last very long.

Be smart: The broader narrative has turned, decisively.

  • The single most important thing any tech investor should do is to go see the new Boots Riley film Sorry To Bother You, which nails the mood of the nation, and its mistrust of Big Tech: People who invested in utopian visions are beginning to feel bait-and-switched.

P.S. An eye-opening way to look at the $119 billion loss, per the Wall Street Journal (subscription): That market value is "larger than 457 of the 500 companies in the S&P 500."

  • Per AP, "the collapse eclipsed Intel's decline of $91 billion in September 2000, without adjusting for inflation. ... Mark Zuckerberg saw his net worth fall by roughly $16 billion ... It was Facebook’s worst trading day since going public in 2012."

Go deeper

Arizona Republicans censure Cindy McCain and GOP governor

Combination images of Cindy McCain and Gov. Doug Ducey. Photo: FilmMagic/FilmMagic for U.S.VETS/Michael Brochstein/SOPA Images/LightRocket via Getty Images

Arizona Republican Party members voted on Saturday to censure prominent GOP figures Cindy McCain, Gov. Doug Ducey and former Sen. Jeff Flake (R-Ariz.), who've all faced clashes with former President Trump.

Why it matters: Although the resolution is symbolic, this move plus the re-election of the Trump-endorsed Kelli Ward as state GOP chair shows the strong hold the former president has on the party in Arizona, despite President Biden winning the state in the 2020 election.

Updated 5 hours ago - Politics & Policy

Coronavirus dashboard

Illustration: Eniola Odetunde/Axios

  1. Health: Most vulnerable Americans aren't getting enough vaccine information — Fauci says Trump administration's lack of facts on COVID "very likely" cost lives.
  2. Education: Schools face an uphill battle to reopen during the pandemic.
  3. Vaccine: Florida requiring proof of residency to get vaccine — CDC extends interval between vaccine doses for exceptional cases.
  4. World: Hong Kong puts tens of thousands on lockdown as cases surge — Pfizer to supply 40 million vaccine doses to lower-income countries — Brazil begins distributing AstraZeneca vaccine.
  5. Sports: 2021 Tokyo Olympics hang in the balance.
  6. 🎧 Podcast: Carbon Health's CEO on unsticking the vaccine bottleneck.

DOJ: Capitol rioter threatened to "assassinate" Alexandria Ocasio-Cortez

Supporters of former President Trump storm the U.S. Captiol on Jan. 6. Photo: Kent Nishimura / Los Angeles Times via Getty Images

A Texas man who has been charged with storming the U.S. Capitol in the deadly Jan. 6 siege posted death threats against Rep. Alexandria Ocasio-Cortez (D-N.Y.), the Department of Justice said.

The big picture: Garret Miller faces five charges in connection to the riot by supporters of former President Trump, including violent entry and disorderly conduct on Capitol grounds and making threats. According to court documents, Miller posted violent threats online the day of the siege, including tweeting “Assassinate AOC.”