Investor disappointment provoked the collapse of Facebook shares

Even after politicians criticized Facebook this year, investors were comforted by resilient revenues and buoyant profit margins.

Now they are forced to badyze not only the regulatory threats they are glimpsed but also the immediate blow that has caused the deep decline in its growth rate.

The reaction of investors was considerable: after missing out on its earnings forecast, Facebook lost more than $ 100 billion in market capitalization, the largest daily decline in value suffered by a listed company in history the United States.

The social media group had reached a record high, and 44 out of 55 badysts rated the stock with a "buy" while investors crowded into the tech sector and denied it. the importance of Cambridge Analytica data filtering.

But it was not the ejaculatory risk that caused the collapse of the action. That was the forecast for a second half with significantly lower growth, which led badysts to recalculate their models for a world where Facebook's annual business growth is in the ## 147 ## #################################################################### 39%, not 40%. David Wehner, chief financial officer, has also forecast margins that will rise from 44% this quarter to about 35% in two years.

While politicians and the press were beating Facebook, investors raised the price. The depth of the inventory decline reflects concerns about the company's current growth and the degree to which investors rushed to enter the high-level club that it runs, the so-called Faang for Facebook, Apple, Amazon, Netflix and Google

It was difficult to determine the lowest forecasts. Neither Facebook nor badysts have blamed the scandal around Cambridge Analytica, the research firm that worked for Donald Trump's election campaign. Wehner pointed out that there were "several factors" behind the lower projections, including currency, new advertising formats and privacy.

"We calculate that the currency will be slightly against the second half compared to the favorable winds we have had in recent quarters," he said. "We plan to develop and promote experiments interesting as stories that currently have lower levels of monetization, and we also offer those who use our services more alternatives in terms of data privacy, which could impact the growth of our revenues, " he said.

The introduction of the general regulation of data protection (RGPD) in Europe has had a negative impact on the growth of users and their participation.The number of daily active users in Europe was reduced by 3 million in the quarter, down almost 1%, and monthly active users decreased but to a lesser extent. corresponded to the forecast it had presented in the previous quarter and that it did not say whether it expected the decline to continue.

But Facebook said that in Europe, the RGPD had not yet had a significant impact on advertising. and that the vast majority of users had allowed Facebook to track other sites visited. In the future, said Wehner, it will only be a "modest impact" on revenue growth.

Daniel Ives, an badyst at GBH Insights, agrees. Their polls with advertisers show that only about 3% of Facebook's revenue is "threatened" because of privacy fears after the GDPR and Cambridge Analytica

. Regulators, investors were surprised by the resurgence of an old fear: that Facebook has reached the limit of the amount of advertising that it can show in the news section.

Participation decreased in the fourth quarter of last year. Facebook reported at that time that in North America users had spent millions of hours less on the platform and that for the first time the number of daily active users had fallen.

Jessica Liu, an badyst at Forrester Research, said that Facebook applications, which include Instagram, Messenger and WhatsApp, are "alive and dynamic". Facebook reported for the first time the total user base of all its applications: 2,600 million active users per month. "A slight decline in one area, like the number of Facebook users, can offset other areas, such as Instagram growth," he said.

Ives commented that the changes in the news section aggravated the advertising problems. "Participation continues to be a topic on the Facebook platform, participation involves advertising."

However, he kept the note "buy" for action because he believes that Facebook's prognosis is proof that there will be a transition period between six and nine months "while the social network is trying to create" the next stage of its growth story ".