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IT has become a brutal reality test for Facebook.
The star of the social network – which has experienced storms over privacy and data protection – is now considering a darker financial future that threatens to end its unbridled pace of growth for years.
At the end of Thursday's session (EST), wiping out some 120 billion US dollars ($ 60 billion) – considered the worst single-day evaporation of the market value of any society.
record with a one-day decline of $ 91 billion ($ 123 billion) in September 2000.
Founder Mark Zuckerberg, who owns a 13% stake in Facebook, has seen his fortune to drop more than 12 billion US dollars in less than 24 hours, to about 74 billion dollars (100 billion dollars).
The fall came one day after the company had missed revenue forecasts for the second quarter and warned that growth would be much lower than previously estimated. Officer David Wehner warned earlier in a profit call with badysts that revenue growth had already "decelerated" in the second quarter and would decline "by high single-digit percentages" in the coming quarters.
At one point in the call, Facebook shares were trading as much as According to Jefferies & Co's badyst, Brent Thill, "many investors are struggling to reconcile this deceleration. It seems that the scale is beyond all we are. "
Facebook said the slowdown would come in part from a new approach to privacy and security, but also seemed to recognize the limits of advertising growth, which accounts for almost all of its revenues .
MORE HUMANS NEEDED
Richard Windsor, a technology badyst who writes the Radio Free Mobile blog, said the new outlook should not surprise.
"This is a direct result of the scale that has become He added that Facebook is forced to hire more people to handle tasks such as filtering inappropriate content after discovering the limits of artificial intelligence
"The weaknesses of the AI require (Facebook) to continue to hire humans to do the work the machines are unable to do," he said. he says.
Brian Wieser of Pivotal Research Group said that "About growth in advertising.
In a research note, he stated that Facebook's outlook "suggests that while society continues to grow rapidly, the 30 percent growth days are more numerous."
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Until Wednesday, Facebook's shares had peaked as investors appeared to ignore data protection fears and private information hijacking polls by the credit rating committee. political consultation. Cambridge Analytica
For the second quarter, earnings increased 31% to 5.1 billion US dollars (A $ 6.9 billion); Revenues increased 42 percent to US $ 13.2 billion (AUD 17.9 billion), slightly below most forecasts.
Facebook indicates that its user base continues to grow but not as fast as expected. Managing Director Mark Zuckerberg said Facebook has invested heavily in security, safety and privacy after being shaken by platform manipulation problems to spread. Misinformation, warning of an "impact" on profitability.
Ross Gerber, an badyst at Gerber Kawasaki, said the latest figures suggest that the trend could turn for Facebook and other social networks. "Mr. Gerber said on Twitter." We told you the last quarter and now we see it. "
NOT SO FAST
Some Analysts said however that it was too early to write off Facebook or its "The company has a history of resetting revenue growth and spending expectations only to reverse and exceed those expectations the following quarter," said Gene. Munster of Loup Ventures
"We suspect that Facebook is sticking to its historical textbook and will, in fact, beat those lower figures."
Richard Greenfield of BTIG Research says he remained optimistic about Facebook despite sudden change in forecast …
"Facebook is actively choosing to make less money, privatizing short-term monetization to push for even higher levels of engagement," he said. Mr. Greenfield in a he notes to the customers.
He said that he could feel the fear in the voice of the investors "after the call of the Facebook badyst, but that he maintained his point of view.
"Mobile is eating the world and Facebook is an essential base to benefit from this change," he said.
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