Facebook stock dives almost 20% on warning of slow revenue growth

26 July, 2018, 13:26 | Author: Kevin Carter
  • Facebook shares fall as user growth slows

Zuckerberg in January said he was going to adjust the news feed to make sure people spend more time on Facebook with meaningful content from their friends and family members - a move the company has said would decrease user engagement with the site.

In fact, it would have wiped out 87 percent of the billionaires in Bloomberg's index.

Facebook Inc saw the first signs of user disenchantment in the midst of public scandals over privacy and content, with second-quarter revenue and average daily visitors missing analysts' projections.

It was Facebook's first earnings report since the European Union's GDPR data privacy laws went into effect, which require companies to request user permission before selling data. In Europe, things were looking dicey as Facebook (NASDAQ:FB) lost 1 million users, sinking to 376 million monthly active users.

Facebook's growth is slowing with users in some of its most lucrative markets.

At the same time, it could be an indication that the appeal of Facebook is slowly wearing thin, especially following all the privacy issues it has recently suffered.

The company remains in a dominant position in mobile advertising alongside Alphabet Inc's Google.

The shift in Facebook's business fortunes follows a series of crises that began in late 2016 with the revelations that it had become a prime distributor of misinformation.

More news: Nerve Agent Poisoning Victim Released from UK Hospital

The 34-year-old Facebook billionaire, who had been worth as much as $86.5 billion when Facebook stock traded at an all-time high earlier in the day, now has a net worth of about $68.9 billion, based on regulatory filings with the U.S. Securities and Exchange Commission.

For almost two years, Facebook has appeared bulletproof despite a series of scandals about the misuse of its giant social network. In terms of revenue, the tech giant earned $13.23 billion but missed Thomson Reuters' estimates of $13.36 billion.

According to the research firm, Facebook-owned Instagram is making up for some of the slowdown in growth at the social network and will generate US$8.06 billion in worldwide ad revenue this year. Facebook disrupted some business by putting in place new rules to get all political advertisers to verify their identities.

All of those problems are hitting amid a harsh truth for the company: Facebook, the social network with 2.23 billion active monthly users, can't grow forever.

Still, Zuckerberg assured investors that Facebook continues to see growth on its core platform, as well as its other properties, which include Instagram, WhatsApp and Messenger.

Shares of Facebook plunged more than 20% in after hours trading, as executives recapped second quarter results that fell short of Wall Street expectations and delivered a financial forecast that seemed to catch investors by surprise.

Zuckerberg said Wednesday that he was hopeful Facebook would be able to limit disinformation and fake accounts, and that the company was able to do so in elections this year in France, Mexico and Germany.

About 2.5 billion people use at least one of the company's apps each month, founder Zuckerberg said.

Recommended:



Popular

Alaphilippe wins protest-hit stage, Thomas keeps Tour lead
Bales of hay blocked the road 30 kilometres into the 218-kilometre leg from Carcassonne to Bagneres De-Luchon. Police removed the obstacles from the road, but were forced to use tear gas to make the farmers disperse.

Man Utd boss Jose Mourinho avoids Premier League title question
Jose Mourinho tells ESPN FC that the World Cup was the flawless habitat for Paul Pogba as he could 'only think about football'.

Trump Tape Released: Trump Suggests Pay With 'Cash,' Contradicting Giuliani's Claim
Cohen was proposing to pay AMI, which owns the National Enquirer newspaper, for the rights to McDougal's story. In addition, Trump's attorneys have not claimed the recording is a privileged attorney-client conversation.

U.S. ‘ready’ to make new Iran deal amid heated exchange
Iran has faced the threat of USA sanctions since Trump decided in May to withdraw the United States from a 2015 agreement between world powers and Iran over its disputed nuclear program.

Military fans out across Pakistan ahead of election
Nawaz Sharif-who is now serving 10-year jail sentence-is viewed by many in Pakistan as a politician with soft corner for India. Almost 106 million people are registered to vote for members of the lower house of parliament and four provincial assemblies.

Damascus Condemns White Helmet Evacuation as 'Criminal Operation'
A second group of White Helmets and their families has been unable to reach the border, a Canadian government source told AFP . In response to the threat, the IDF launched 2 David's Sling aerial defense system interceptors.

Chrysler group puts Briton Mike Manley in driving seat
Elkann went on to describe Marchionne as a mentor, true friend and an "enlightened leader" with unusual intelligence. Marchionne put Manley in charge of the Ram brand as well as Jeep in 2015.

Zimbabwe vs Pakistan - Highlights & Stats
Fakhar Zaman and Imam-ul-Haq added 168 runs for the opening wicket which was also their fourth hundred-run partnership. Prince Masvaure made 39 and Ryan Murray contributed 47 - personal bests for both players in their short careers.

War Damage Would Deepen Under Confidence Shock, IMF Says
In response, government regulators have blocked a number of Chinese acquisition deals involving American firms this year. President Trump has stated that he will tax 10 percent on further imports valued at $200 billion that come from China.

Trump says Russian Federation to 'help with North Korea'
"Russia has agreed to help with North Korea, where relationships with us are very good and the process is moving along". Chris Van Hollen, D-Md., to deter future Russian interference by ordering sanctions against countries if they do.