Facebook plunges more than 24 percent on revenue miss and projected slowdown

27 July, 2018, 10:42 | Author: Sheri Evans
  • Facebook market value plunges $119 billion

Facebook had the largest-ever loss of value in one day for a USA traded company. Wehner said the company will invest billions of dollars per year improving safety and security after a bruising period of headlines about Facebook's role in enabling fake news and election meddling.

Facebook also surprisingly missed on advertising revenue projections, reached $13.04 billion compared with the StreetAccount and FactSet estimate of $13.16 billion.

The social media platform's second quarter earnings report showed it had lost approximately a million monthly users and 3 million daily users in Europe, with no user growth in the US.

Yet Facebook is hardly a stranger to a volatile stock price and has rebounded from previous mishaps, including Cambridge Analytica. The UK-based company had gained access to the personal data of tens of millions of Facebook users through a third-party application, and some of that data was reportedly used to target advertising during the 2016 Brexit referendum and the USA presidential election.

Facebook CEO Mark Zuckerberg's net worth plummeted more than $15 billion with the stock dive, although it's still around $67 billion, according to Forbes' real-time net worth tracker.

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In this March 29 photo, the logo for Facebook appears on screens at the Nasdaq MarketSite in New York's Times Square.

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Both the slower growth forecast and heavier spending reflect problems largely of Facebook's own making. The ad sales portion of revenue hit $13 billion in the second quarter, good for a gain of 42 percent from the year prior.

Brian Sheehan, a Syracuse University professor of communication and advertising, said the weak forecast "made investors nervous about more basic long-term issues" with the huge social network, notably its diminished appeal to younger users.

Growth in the number of users who logged in each day fell short, too, up 11 percent year-over-year at 1.47 billion but still less than the 1.49 billion anticipated.

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What's more, Sherly Sandberg, Facebook's chief operating officer, warned that there could there could be further GDPR-related consequences in the months to come, according to CNBC.

Siva Vaidhyanathan, a media studies professor at the University of Virginia and author of the new book, "Antisocial Media: How Facebook Disconnects Us and Undermines Democracy", dismissed the significance of the stock plunge.

Shares closed down nearly 19 percent, at $176.26.

What drove the selloff: Investor concern about Facebook's growth cooling down.

The "Dispatches" show featured an undercover reporter who went to work at Irish staffing firm CPL Resources, which acts as Facebook's largest centre for United Kingdom content moderation.

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