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Why was Facebook down and how is it affecting share prices?

Why was Facebook down and how is it affecting share prices?

You probably felt it in some way. Your friends did not answer you first and only five of your top posts showed up on your feed. This is because Facebook - and its services like Instagram and WhatsApp - have not been working. This has been going on for 6 hours in early October.

 

Why was Facebook down? 
 

This was probably because a DNS system error happened. DNS records tell systems how to find domains, like Facebook.com, Instagram.com and so on. These records probably got withdrawn for some reason. Only Facebook has access to their DNS records. This might be the result of an internal systemic change or a faulty update within the company.

To be more precise, their BGP route advertisements which control the routing between large networks were withdrawn. And now, they can't route to their network to fix it, because their connection was not established. This meant, they couldn't get into their building as well, as even Facebook's entrances are controlled by those corporate systems which are down. 

Another problem is that their internal communications were also not working, as they are dependent on these tools. This means that their major in-house communication networks were most probably unavailable, which lengthened the process of fixing. 

 

How is it affecting share prices?
 

Generally, it is easy to generate mistrust when a company's core service doesn't work for longer periods. Facebook is intertwined with many markets like digital marketing (think of ad campaigns for example). As it is spread to many fields of work, this leaves Facebook with huge losses in their books. Instability, losses, and the depth of this issue can easily lead to panic within the shareholders as they are selling their positions. 3 hours after the problem occurred Facebook was down 16% from its all-time high.

 

How to buy Facebook shares
 

Some investors stay away from such news, some join the game. If you are interested in getting into Facebook shares during this strange time, head over to our guide on How to buy Facebook shares for more info on the topic.

 

Author of this article

Bence András Rózsa

Author of this article

Bence András Rózsa is an experienced broker analyst. Having an MSc in international economy and finance, he focuses on equities, cryptos and newcomer financial services. He also has 2+ years of experience within the brokerage industry specializing in stock- and CFD/forex brokers, crypto providers and robo-advisors.

Bence András Rózsa

Broker Analyst

Bence András Rózsa is an experienced broker analyst. Having an MSc in international economy and finance, he focuses on equities, cryptos and newcomer financial services. He also has 2+ years of experience within the brokerage industry specializing in stock- and CFD/forex brokers, crypto providers and robo-advisors.

Everything you find on BrokerChooser is based on reliable data and unbiased information. We combine our 10+ years finance experience with readers feedback. Read more about our methodology

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