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Facebook shares lost up to a quarter of their value on Wednesday after executives said profit margins would drop for several years because of the costs of improving confidentiality guarantees and slowdown in the use of the largest advertising markets. The quarter results were the first sign that a new European law on privacy protection and a succession of privacy scandals involving Cambridge Analytica and other application developers have a little influenced the activities of Facebook. The company also warned that the toll would not be offset by emerging market revenue growth and Facebook's Instagram application, which was more immune to privacy concerns.
who missed expectations and then issued warnings about growth and future spending.
Profit margin, which fell to 44% The Chief Financial Officer, David Wehner, said that the share price would collapse up to 150 billion dollars in market capitalization. and erased gains from the action since April when Facebook announced a surprisingly strong 63 percent increase in profits and an increase in users.
If the decline in shares continues Thursday, it d The biggest fall of Facebook in a day, exceeding 12% in July 2012
The futures on the Nasdaq fell 0.85% Wednesday, suggesting that the Nasdaq Composite index, rising sharply, would drop on Thursday morning. Facebook's results have prompted sales in other Nasdaq lists, including Amazon.com's media and advertising rivals, Netflix and Alphabet.
"Entering a New Time"
Facebook warned investors to expect a quarterly cost due to efforts to address concerns about mismanagement of users' privacy and to better monitor what users are posting. Total spending in the second quarter jumped to $ 7.4 billion, up 50% from the previous year.
Facebook is planning similar increases for the second half, also citing spending on video content and marketing.
Revenue growth, however, surprised investors and prompted many questions from financial badysts during a conference call with business executives on Wednesday.
In the second quarter, sales rose 42% to $ 13.2 billion. Weyner said that quarterly revenue growth would be closer to 30% the rest of the year.
He cited currency fluctuations and a change in the use of features where Facebook shows less advertising or less fees because of
The General Data Protection Regulation (GDPR) in the # The European Union will also lead to lower revenues. The new privacy law has imposed several changes to Facebook's privacy requirements and registration process, which has led a minority of users to opt for non-personalized ads that typically generate less income.
We believe this is due to slower user growth and privacy, "said Ali Mogharabi, Morningstar Analyst
. The global daily growth of users of Facebook's namesake service slid for its sixth consecutive quarter, bringing it to nearly 1.5 billion users in the second quarter.
The company said for the first time that more than 2.5 billion users interact with at least apps each month, but badysts said that many of them spend more time with Messenger , WhatsApp and Instagram. The commercialization of these applications is nascent.
Revenues from emerging markets have not taken over. Sales in the United States, Canada, and Europe fell $ 75 million in the second quarter from a year earlier, while revenues in other markets increased $ 51 million
. "Enter a new period" where the decline in user growth will translate into slower revenue growth.
He added that Facebook had "a road map to revise its growth and spending forecasts for the next quarter." 19659002] Facebook reports $ 5.1 billion in profits, or $ 1.74 per share, compared with an average of $ 5.1 billion and $ 1.72 per share among Thomson Reuters research
.
Facebook suffered a blow to China on Wednesday when regulators withdrew their approval from a business innovation center to support local startups, the New York Times
erroneous about WhatsApp contributing to mbad killings in India have added to the pressure on Facebook to reevaluate the way its services provide security and decorum.
Services have been the subject of closer scrutiny since US intelligence agencies revealed in January 2017 that Russian government-related organizations had sowed content on the platform to shake up the 2016 US presidential election.
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