Facebook collapses on the stock market, is this the beginning of the end?

Back to Earth for Facebook. While the stock withstood the odds against scandals – with a rise of 43% since the Cambridge Analytica case – it fell 19% on Thursday. In one day, $ 119 billion of capitalization surged after quarterly results deemed disappointing, unheard of on Wall Street. This is more than the valuation of most French companies in the CAC 40. Simple correction or problem of substance, the badysts are divided.

Facebook arrives at saturation

That had to happen: the number of members of Facebook continues to grow, but slow. With 2.23 billion monthly users (and 1.47 billion daily), this is certainly an increase of 11% over one year. But in the United States and Europe, the most lucrative markets for advertising, Facebook is out of place. In Europe, the company even lost three million users compared to the previous quarter, a decline attributed to the entry into force of the Data Regulation (PGR).

Fighting Scandals Affects Margin

] Up 42%, to $ 13.2 billion, the turnover would make any company dream. If it was slightly lower than Wall Street's expectations, it's mostly Facebook's chief financial officer's forecast of the operating margin that has cooled everyone down. It has already fallen from 47% to 44% over 2017, and "over the next few years, we expect a figure around 35%," said David Wehner during the conference call with investors.

clear, Facebook plans to spend more. The company must double (from 10,000 to 20,000) its staff in charge of security and moderation, to better fight against leakage of personal data, Fake News,
hate speech and harbadment. Criticized on the negative impact of social networks, Mark Zuckerberg has also readjusted the company's strategy, which puts more emphasis on personal publications (posts and stories) than those of companies and brands. He warned that this was likely to affect sales.

"Social networks have reached their peak"

For Richard Windsor, an badyst at Radio Free Mobile, these prospects should not be surprising. "It has become increasingly difficult to grow at such high rates when a group reaches this size," he writes on his blog. For Brian Wieser, an expert at Pivotal Research, Facebook seems to have reached a "ceiling" in revenue growth through advertising. Ross Gerber, badyst at Gerber Kawasaki, sees in these figures the proof that the wind turns for social networks. "They have reached their peak," he tweeted.

"The company has a history of readjusting growth, only to take the opposite direction and exceed those expectations in the next quarter," relativised Gene Munster , from Loup Ventures, in a note. BTIG badyst Richard Greenfield has confidence in Facebook despite these pessimistic forecasts: "The mobile phone is conquering the world and Facebook is at the center to benefit from this change. It's worth remembering that Facebook is the only company in the world with four services with more than a billion monthly users (Facebook, WhatsApp, Messenger and Instagram). This may be the beginning of the end of stratospheric growth but Facebook is here to stay.