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San Francisco – Embarrbaded in controversy, with disappointing results, Facebook saw its stock market value plummet to 119 billion dollars on Thursday, unheard of on Wall Street.
The action of the first social network in the world has unscrewed Thursday since the first exchanges on Wall Street and this vertiginous movement continued all day.
At closing, the title was worth 176.26 dollars, a fall of 19%. This is the largest valuation loss ever recorded in a Wall Street session.
The fall is all the more severe as the stock has recently been evolving to very high levels: it is therefore likely that the stock has also suffered large profits.
Facebook has literally sounded the markets Wednesday by publishing a turnover – below expectations although up 42% to $ 13.2 billion – and making a dark forecast for the rest of year. Another disappointing element and very observed: the number of users, lower than expected.
– Several factors –
Its leaders have been bluntly, the slowdown in growth – due to a combination of factors – already observed in the second quarter, will continue significantly in the coming quarters.
According to Facebook, this slowdown results in part from a new approach to personal data and security – at the heart of the Cambridge Analytica (CA) scandal that erupted in mid-March – but Mark Zuckerberg's group also recognizes the limits growth through advertising, which provides almost all of its revenues.
" We are investing so much in our security systems that it will start to affect our profitability, and we are starting to see it this quarter ," tried to justify Mark Zuckerberg, after spending months to try to restore the blazon of Facebook in the wake of the case CA.
The group warned in fact for two years that its growth will eventually slow down, lack of advertising space available on the network, completely saturated in this area.
Goldman Sachs badysts expect revenue growth to slow to + 35% year-on-year in the third quarter and even 29% in the fourth quarter, far from the 49% recorded in the first quarter. quarter.
Evidence of the catastrophic effect of these announcements, badyst Brent Thill (Jefferies & Co.) reported Wednesday just after the publication that " many investors (had) struggled to understand the slowdown ( …) It looks like its scale is unprecedented ".
But some badysts called Thursday to relativize because the slowdown was predictable and Facebook is still unavoidable for the public and especially advertisers.
RBC badysts recalled that the group " still holds two of the world's largest social media (Facebook and Instagram) and the two largest messaging services (Messenger and WhatsApp) ", the latter two still have potential for growth while there is no major change in the opinion of advertisers as to the attractiveness of Facebook platforms.
For Richard Windsor, an badyst at Radio Free Mobile, these prospects can not be surprising: " it has become increasingly difficult to develop at such high rates when a group reaches this size ," he writes on his blog.
badyst adds that Facebook is forced to recruit more staff to handle tasks such as filtering inappropriate content not spotted by artificial intelligence.
– Back to reality –
Some badysts have estimated that the group may have simply warned of the worst possible scenario.
" The company has a history of readjusting revenue growth and cost estimates, only to take a step back and exceed those expectations in the next quarter ," said Gene Munster, from the cabinet Loup Ventures.
Richard Greenfield, badyst at BTIG, trusts Facebook: " the mobile phone conquers the world and Facebook is in the center to take advantage of this change ," he says.
The fall is all the more brutal as Facebook seemed almost invulnerable until Wednesday, investors seeming to ignore the concerns related to the scandal of personal data that leaked to the British firm Cambridge Analytica, and all investigations in progress.
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