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Why Facebook Stock Fell Monday

This article was originally published on All figures quoted in US dollars unless otherwise stated.

What happened

Shares of Facebook (NASDAQ: FB) took a hit on Monday, falling 4.5% by the time the market closed. Shares were down along with the broader market. The Nasdaq Composite slid 3.5% as investors were spooked by the spread of the coronavirus to Italy and South Korea.

So what

Investors should put the stock's decline into context. Shares are still up 23% over the past 12 months even after today's drop. Some investors, therefore, may have simply decided to take some profits on the tech stock amid these coronavirus fears.

Now what

Investors should remain focused on the long term, valuing stocks based on fundamentals. It's possible that the coronavirus could hurt advertising spend on Facebook's platform. Investors, therefore, should keep an eye out for any commentary from management on whether or not the virus' outbreak is having a material impact on the social network.

This article was originally published on All figures quoted in US dollars unless otherwise stated.

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Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool's board of directors. Daniel Sparks has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and recommends Facebook. The Motley Fool Australia has recommended Facebook. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.