Written by Norman Isaac Mwambazi

Facebook’s terrible day: Shares drop to their worst in nearly a year as Instagram, WhatsApp all shut down for over 6 hours; stock is still a “Buy”

Facebook Inc. (ticker: FB) will like to forget the afternoon and evening of yesterday, Monday, October 4, 2021, as it …

Facebook Inc. (ticker: FB) will like to forget the afternoon and evening of yesterday, Monday, October 4, 2021, as it was one of the darkest days in over a decade. Over 2.89 billion users of Facebook, 1.074 billion Instagram users, and 2 billion WhatsApp users globally all couldn’t access those services for more than six hours.

As soon as the services went down, Facebook, WhatsApp, and Instagram took to Twitter to announce an outage that had already been detected by millions of users worldwide, and these said that their engineers had already embarked on the tedious work of getting the affected services back up, a job that took them hours.

“We’re aware that some people are having trouble accessing our apps and products. We’re working to get things back to normal as quickly as possible, and we apologize for any inconvenience,” Facebook posted on its official Twitter page.

The world’s largest social network was inaccessible, with some rumours making rounds that its domain name, facebook.com was up for sale!

The terrible day got even worse when the company’s shares started falling, and it ended the day with a 5% loss, the lowest it has fallen since November 9, 2020. Facebook’s fall yesterday was worse than the broad S&P 500 index and the tech-heavy Nasdaq Composite Index, which fell 1.3% and 2.1%, respectively. The drop in Facebook shares wiped about $7 billion from CEO Mark Zuckerberg’s net worth.

The entire Facebook suite (Facebook, Instagram, WhatsApp, Messenger) was all down; some employees could not even enter the Facebook HQ at Menlo Park, California, because their systems were locked down. The status dashboard that Facebook uses to communicate with developers was also down, and the outage was so bad that it could not be fixed remotely, so Facebook had to send a team of engineers to its main data centre in California to reboot the servers manually and fix whatever was causing the outage.

According to reports from engineers with insider information, Facebook’s internal systems were also down, so Facebook employees and engineers could only use emails as the primary mode of communication.

In Facebook’s statement on Twitter amidst trolls from other tech giants and corporate company Twitter accounts, the company did not divulge details on what caused the outage. Still, the company’s Chief Technology Officer (CTO) Mike Schroepfer said that the company was experiencing “network issues” on Twitter.

“*Sincere* apologies to everyone impacted by outages of Facebook powered services right now. We are experiencing networking issues, and teams are working as fast as possible to debug and restore as fast as possible,” Schroepfer tweeted as the company was struggling to get back online.

Other experts said that the problem appeared to be with Facebook’s domain-name system (DNS).

After more than six hours, Facebook and Instagram’s landing pages started loading. WhatsApp was back online 30 minutes later. Still, Schroepfer said that it would take the company some time to fully restore the service in another tweet where he expressed his apologies on behalf of the company to whoever was affected by the outage.

“Facebook services coming back online now – may take some time to get to 100%.  To every small and large business, family, and individual who depends on us, I’m sorry,” Schroepfer tweeted. The company has since issued an elaborate statement in which it said that the outage was caused by changes in the configuration of its routers.

“Our engineering teams have learned that configuration changes on the backbone routers that coordinate network traffic between our data centres caused issues that interrupted this communication. This disruption to network traffic had a cascading effect on the way our data centres communicate, bringing our services to a halt,” the statement on the company’s engineering website reads in part.

The outage was an addition to an already bad day at Facebook as a whistle-blower, Frances Haugen, had dragged the company’s image and activities in the mud during a 60-minute interview that was broadcast all over the U.S. by ViaconCBS. In the interview, Haugen, a former data scientist at Facebook, alleged that the social media giant prioritizes profit over the safety of its users across its services and that it has been lying to its investors about how it tackles misinformation and hate speech on its platform. Over the years, Facebook has been called out by several groups of people on how it “shuts up” voices from certain individuals and “amplifies” others. Haugen will testify before Congress sometime today.

Whistle-blower and outage woes aside, Facebook is also still battling the Federal Trade Commission (FTC) over an antitrust suit filed by the latter against the company’s monopolistic business practices. In a suit filed in the U.S. District Court for the District of Columbia, the FTC claims that Facebook used its financial power to buy or bury competition when it bought photo- and video-sharing app Instagram for $1 billion in 2012 and instant messaging service WhatsApp Inc. in 2014. The FTC says that Facebook, which surpassed the trillion-dollar mark in market capitalization in July, should be broken up. Its value has since gone down, and its market cap is now at $919 billion.

However, Facebook has defended itself from all these allegations, and yesterday, it filed a motion in the same court to dismiss the antitrust lawsuit against the company, citing things like the FTC suit doesn’t have evidence implicating the company’s breach of any antitrust laws.

“[..] The amended complaint still pleads no facts plausibly establishing that Facebook has, and at all relevant times had, monopoly power,” Facebook’s motion reads in part. The judge has until mid-November to make a ruling on this case.

Until yesterday, Facebook stock had stood strong amidst all the lawsuits from the FTC. This year, Facebook shares have increased 21.30%, outperforming the benchmark S&P 500’s 16.21% growth in the same period. In the past 12 months, Facebook has seen its stock gain 23.27%, which is why Wall Street consensus analysts still give Facebook a “Buy” rating. Of the 51 analysts polled by FactSet, 38 of them give it a “Buy” or equivalent rating, 12 recommend investors to “Hold” it, while only one gives it a “Sell” rating. On average, analysts expect Facebook share price to hit $421.55 in the next 12 months.

Feature photo by the Economic Times.