Thread: Facebook plunges 20% as revenue, user growth disappoint

Facebook plunges 20% as revenue, user growth disappoint

By Thomas Barrabi
Published July 25, 2018

Facebook shares plunged by as much as 23% in after-hours trading Wednesday as the social media giant warned of slowing growth in coming quarters as it ramps up spending to address concerns about data privacy and "fake news" on the platform.

Chief Executive Mark Zuckerberg said the company “will continue to invest heavily in security and privacy,” adding that the associated cost would likely hurt profitability in upcoming quarters. Facebook has taken steps to address concerns about data privacy and “fake news” on the platform.

Expenses will rise by 50% to 60% this year as Facebook invests in data security, new technology and other initiatives, CFO David Wehner said.

The company missed expectations for second-quarter revenue and reported sagging user growth in key markets after the Cambridge Analytica data breach.

Facebook’s tally of second-quarter global daily active users, a key metric for tracking user engagement, rose 11% to 1.47 billion. Analysts had expected 1.49 billion daily active users. The company reported a total of 2.23 billion monthly active users, below a projected 2.25 billion.

User growth stalled in the key U.S. and Canada region, as the platform’s base 241 million monthly active users was unchanged compared to the first quarter. Monthly users declined slightly in Europe after the implementation of new data privacy regulations in the region.

Revenue also fell short of Wall Street’s expectations, rising 42% to $13.23 billion, less than the $13.36 billion estimate polled by Thomson Reuters. Advertising revenue also fell slightly short of estimates despite rising 42% to $13.04 billion, with mobile advertising accounting for 91% of that total.

T​​​​​he company beat on earnings, which rose 32% to $1.74 per share against an expected $1.72. The social media giant has faced unprecedented scrutiny since reports surfaced that British data firm Cambridge Analytica had improperly accessed the personal data of up to 87 million users.

The second-quarter marked the first full financial period since the data breach became public knowledge.

The after-hours drop in the shares on Wednesday came as the stock hovered at an all-time high with gains of over 21% this year.

This is a breaking story and will be updated.

https://www.foxbusiness.com/markets/...ers-disappoint

Facebook's drop in market value marks biggest-ever one-day loss in U.S. stock market history

By Megan Cerullo
Jul 26, 2018 | 7:00 PM

Facebook lost nearly $120 billion in market value as its stock cratered Thursday.

The drop in value — which chopped more than $15 billion off chief executive officer Mark Zuckerberg’s personal fortune — marked the biggest-ever one-day loss for a company in U.S. stock market history.

Its shares fell 19% to $176.26 a piece, one day after company executives forecast years of reduced profit margins amid increased spending on security initiatives in the wake of numerous privacy-related scandals.

Revenue through Instagram, which has fewer privacy concerns, would not be sufficient to recuperate lost value, company executives said Wednesday, when the company’s stock was at an all-time high of $217.50.

http://www.nydailynews.com/news/nati...726-story.html