Facebook's stock only dropped around 20%, while its market cap. dropped by 35%! Why is this?

[scobranchi]

No disrespect but Joe has no idea what he's talking about. Also, why do you think FB's market cap dropped 35%? Let's look at the numbers. A drop from $38/share to $31.5/share is a drop of 17%. Using your numbers of 106 billion and the the current market cap of $87 billion it's a drop of 18%. The numbers should be exactly the same but we probably don't have the correct figures for an exact calculation.

By definition, a company's market capitalization is the number of shares multiplied by the share price. If the stock price drops by a certain percentage, the market cap drops by the same percentage. That's why you see things like stock prices dropping if a company issues more shares (dilution) or splits the stock. The company is not inherently more valuable - the market cap remains unchanged in the short term.