Catched up by scandals, Facebook bites the dust

Struck by repeated controversies, Facebook literally sounded the investors Wednesday warning of a slowdown in its future growth and publishing quarterly results deemed particularly disappointing, raising questions about its ability to extricate itself from scandals

Around 00H15 GMT (Thursday), the stock plummeted by more than 20% to 173.50 dollars in electronic trading after the closing of Wall Street while he was at the highest during the session. [19659002ItremainstobeseenwhetherthiscoupwillbeconfirmedattheopeningofthestockmarketThursdayA20%declineinthestockcorrespondstoabout$130billioninstockmarketvaluation

Attempting to explain the group's disappointing performance, its managers explained that they had suffered the consequences of several factors, including repeated scandals. , which are very expensive for investment, or, to a lesser extent, the European Data Protection Regulation (RGPD) entered into force in the European Union in late May to better regulate the use of personal data.

"This is a crucial year" for Facebook, commented his boss Mark Zuckerberg during a conference call with badysts. "We are investing so much in our security systems that it will start to affect our profitability, we are starting to see it this quarter," he continued, after months of trying to restore the image of the biggest network

Users' personal data – at the center of the global badytics scandal, Cambridge Analytica (CA) that broke out in mid-March – is the basis of Facebook's business model, with almost all of its revenues coming from sales of advertising space. Bad for its image, these controversies could cool public and advertisers.

– "Unexpected Magnitude" –

Hence the desire of Facebook to invest heavily (hiring, technology, Research and Development …) to regain their confidence. In the interest of "transparency", the group also decided to provide users with more information about advertisers who put ads on the network, at the risk of scalding them.

Even worse, the group He also warned that the slowdown in growth and the rise in spending will continue in the coming months. In addition, "we expect the increase in spending will be greater than that of turnover" in 2019, also prompted Dave Wehner, chief financial officer of Facebook.

Evidence of the catastrophic effect of these ads, the badyst Brent Thill (Jefferies & Co.) noted during the conference call that "many investors are struggling to understand the slowdown … it looks like its magnitude is unprecedented."

Ross Gerber , an badyst at Gerber Kawasaki, sees in these figures the proof that the wind turns for social networks. "They have reached their peak," he said on … Twitter.

Even before the blows of the forecast, investors had already reacted very badly to the turnover, yet up 42 % to 13.2 billion but below expectations of badysts. Above all, the annual growth rate was 49% at the end of the first quarter.

The group also disappointed with its 2.23 billion monthly active users – hardly more than at the end of March and less than expected by the markets. Disappointment also for daily active users, who were 1.47 billion in late June, less than hoped. The number of users in Europe has even "dropped slightly (…) because of the implementation of the RGPD," said Zuckerberg.

For the first time, Facebook reported that 2.5 billion people used at least one of the apps in the group every month, be it Facebook, WhatsApp, Instagram, or Messenger.

Wednesday's announcements made it all the more like a cold shower than the band did Until then it had not really suffered financially scandals, especially around the proliferation of "fake news" during the US presidential campaign in 2016. And even if its title had been abused at the time of Cambridge Analytica, the group had more than caught up with its

More generally, Facebook also suffers from a growing disaffection on the part of the youngest, who are turning in particular to its Instagram photo sharing platform, which has just pbaded the billion users and whose c growth helped the turnover of its parent company, thus limiting the breakage for the entire group.

Investors completely neglected the net profit, which however jumped 31% to 5.1 billion dollars.

Facebook is the subject of numerous complaints and investigations worldwide following the latest scandals in recent months.