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.
Kacouris accuses Facebook and its two top-managers of making misleading statements or failing to disclose slowing revenue growth, falling operating margins and declines in active users.
Kacouris said the marketplace was "shocked" when "the truth" began to emerge on Wednesday from the Menlo Park, California-based company. Facebook CFO, David Wehner commented on the issue, saying: "Our total revenue growth rates will continue to decelerate in the second half of 2018, and we expect our revenue growth rates to decline by high-single-digit percentages from prior quarters sequentially in both Q3 and Q4".
Earlier this year, Facebook was embroiled in the Cambridge Analytica scandal, and took big steps to make the platform more personal and secure immediately after. Though the company boasts a massive 2.23 billion users, the growth in active daily users has fallen from 17% previous year, to 11%.
Other big Facebook investors also took a hit as disappointing second-quarter results obliterated $119 billion of market value, the most ever in a day for a USA company. This was after a 19 percent one-day plunge in the company's share price.
Zuckerberg, 34, is now the world's sixth-richest person with $70.6 billion, down three rungs on the Bloomberg Billionaires Index. The company was worth over 630 billion dollars the previous day.
Facebook shares fell another 0.8 percent on Friday, closing at $174.89 on the Nasdaq.
As expected, most investors grumbled, though some were happy especially since the stock surged.