Facebook loses $ 128 bi in market value and sees the scandal happen

Facebook yesterday felt the first significant impact of the scandals in which it has been involved in recent months. Yesterday, in announcing its second quarter results, the company expected a decline in profit margins and the number of users for the rest of the year. As a result, social network shares fell 20% after the market closed in New York. That meant a $ 128 billion market value loss in hours for the social network – CEO Mark Zuckerberg was already seeing his fortune drop by $ 16 billion. The decline in Facebook shares has also brought down the technology market.

The market loss recorded last night exceeded $ 95 billion in devaluation at the height of the Cambridge Analytica case. The case has shown how Facebook has made a number of bad decisions in recent years by not protecting the privacy of its users – in the scandal, the board has poorly obtained information from 87 million people via the network social. The company has also been criticized for allowing the spread of false news during the US presidential campaign in 2016.

The wave of negative news has caused Facebook to change its privacy and security policies. Mark Zuckerberg, co-founder of the social network, gave explanations to the United States and Europe. The crisis control job seemed to have worked. "Facebook's credibility with investors has been affected," said Pedro Waengartner, professor of advertising and marketing school (ESPM). "If the results and projections were good, the impact could not occur.] Users. At the end of June, Facebook reached 2.23 billion active monthly users in its social network – an increase of 1.54% over the first quarter of 2018. It is the slowest growth rate of business users in three years – and half of the average for the period, which was above 3% per quarter.In developed countries, the result is even worse: in the United States the company is stable at 241 million users.In Europe, where new legislation on Data privacy came into effect in May, Facebook lost 1 million users, falling to 376 million active registrations each month.

At an investor conference , the company's financial director, David Wehner, attributed the bad res Further to the new law of the European Union, which limits the activity of technology companies and can impose fines of up to 4% of its global business turnover. "Continuing to grow in number of users was already a challenge in itself," said Waengartner, "with the scandal, it has become even more difficult."

Revenue. In the second quarter of 2018, Facebook saw its business turnover reach $ 13.2 billion, up 42%, below the pace of previous periods – in the first quarter, the company saw the metric increase by 50% for example.

And there is no forecast of improvement on the horizon. The company's chief financial officer said he foresaw further declines in revenue growth over the coming quarters. "It's a combination of factors, between the exchange, focus on new experiences, such as (ephemeral messages) Stories, and (measures to) give users more power of privacy." said Wehner. has increased sharply over the period due to the growing concern for privacy and user safety in response to the Cambridge Analytica scandal. In the second quarter, expenses totaled $ 7.3 billion, an increase of 48% over the same period last year.

The growth rate of spending should also continue to increase in the coming months,. According to Wehner, the company's operating margins are expected to stabilize around 30% over the next three years. In the last quarter, the percentage was 38%; between January and March, the indicator had scored 41%.