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It has become a brutal check of reality for Facebook
The star of the social network – who has survived the storms of privacy and data protection – is now looking for cooler growth after a long cycle of years. The Facebook business figure fell 19% to close at 176.26 dollars on Thursday, wiping out some $ 100 billion – the worst daily evaporation of a market value for a company.
The fall was caught one day Chief Financial Officer David Wehner warned Wednesday in a profit call with badysts that revenue growth had already "decelerated" in the second quarter and would decline "by high percentages to a single figure" . "In the coming quarters."
At one point in the call, Facebook shares fell by 24 percent, an unprecedented drop for a large company.
According to Brent Thill, badyst at fferies & Co., "many investors are struggling to reconcile this deceleration … it seems that the magnitude exceeds anything we've seen."
Facebook said the slowdown would come in part A new approach to privacy and security also seems to recognize the limits of advertising growth, which accounts for almost all of its revenues.
Brian Sheehan, professor of communication and security "With or without privacy concerns, investors are worried that Facebook's interactions, especially with the under-25s, will drop," said Sheehan.
– More hum So are needed –
For the second quarter, earnings rose 31% to $ 5.1 billion; revenues increased 42% to $ 13.2 billion, which is only slightly lower than most forecasts.
Facebook reported that its user base was still growing but not as fast as some expected. Monthly active users rose 11 percent to 2.23 billion – below most estimates of 2.25 billion.
Richard Windsor, a technology badyst who writes the Radio Free Mobile blog, said the new outlook should not come as a surprise. Windsor wrote:
Windsor added that Facebook is forced to hire more people to handle tasks such as filtering inappropriate content after discovering the
"Weaknesses in Artificial Intelligence oblige (Facebook) to continue to hire humans to do the work the machines are unable to do, "he said.
Brian Wieser of Pivotal Research Group In a research note, he said that Facebook's prospects "suggest that even if the company continues to grow rapidly, the days of growth of 30% and more are numbered. Until Wednesday, Facebook shares had hit record highs, as investors appeared to be ignoring data protection and private information hijacking polls by Cambridge Analytica.
Managing Director Mark Zuckerberg said that Facebook had invested heavily in "security, safety and privacy" after being shaken by handling concerns from the platform to spread misinformation, warning of 39 "an impact" on profitability
He stated that it was too early to write off Facebook or its growth prospects, and that society could simply have warned of the worst case.
"The company has a proven track record of revenue and expense growth." Gene Munster of Loup Ventures
"We suspect that Facebook is sticking to its historical manual and will, in fact, Richard Greenfield of BTIG Research said that he remained optimistic about Facebook despite the abrupt change in forecast.
"Facebook is actively choosing to make less money, privatizing short-term monetization to push for more. Commitment to even higher levels. "Greenfield said that he could" feel the fear / panic in investors' voices "after the call of Facebook badysts, but that he maintained his point of view
" Mobile eats the "
Mark Mahaney, an RBC Capital Markets badyst, said this decline creates a rare opportunity to buy shares of Facebook
" Facebook still holds two of the largest media outlets. Worldwide badets (Facebook and Instagram) and the two largest messaging badets in the world (Messenger and WhatsApp), "said Mahaney in a note to customers, adding that he sees" no significant changes in views marketing of the "activity" Facebook platforms.
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