Facebook's actions sink on the perfect storm of bad news »Manila Bulletin Technology

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Facebook shares have Dropped 19% to close at $ 176.26 Thursday, wiping out some $ 100 billion

The fall occurred a day after the company missed the revenue forecast for the second quarter and warned that growth would be much lower than previously estimated.

David Wehner, chief financial officer ndday in a revenue call with analysts that revenue growth had already "decelerated" in the second quarter and would drop "by high single-digit percentages "in the coming quarters.

At one point in the call, Facebook shares were down as much According to an analyst at Jefferies & Co., Brent Thill, "many investors are struggling to reconcile this deceleration … It seems like Scale is beyond anything we can do. & # 39; saw. & # 39;

Facebook said the slowdown will come in part from a new approach to privacy and security, but also seemed to recognize the limits of advertising growth, which accounts for virtually all of its revenues.

Brian Sheehan, a professor of communication and advertising from Syracuse University, said the weak forecast "has made investors nervous about more fundamental issues in the long run" with the huge network social, especially its reduced appeal for young users

"With or without privacy concerns, investors are concerned that Facebook's interactions, especially with those under 25, are diminishing," Sheehan said.

quarter, earnings rose 31% to $ 5.1 billion; Revenues increased 42% to $ 13.2 billion, which is slightly lower than most forecasts.

Facebook reported that its user base was still growing, but not as fast as expected. Monthly active users rose 11 percent to 2.23 billion – below most estimates of 2.25 billion.

Richard Windsor, a technology analyst 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 of 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 stated that Facebook's prospects "suggest that as the company continues to grow at a rapid pace, the growth days of more than 30 percent are numbered . Until Wednesday, Facebook's shares had peaked as investors appeared to be ignoring data protection and private information hijacking polls by Cambridge Analytica's policy consulting firm

. invests heavily in "safety, security and privacy" after being shaken by worries of handling the platform to spread misinformation, warning of "impact" on profitability

However it was too early to write off Facebook or its growth prospects, and the company could have simply prevented the worst case scenario. ", Said Gene Munster of Loup Ventures

" We suspect that Facebook is sticking to its historical manual and that, in fact, "

Richard Greenfield of BTIG Research said that it was optimistic about Facebook despite the abrupt change in forecasts.

"Facebook is actively choosing to make less money, privatizing short-term monetization to boost engagement Greenfield said he could" feel the fear / panic in the voice of investors "after the call of Facebook analysts, but that he has maintained his prospects.

"Mobile is eating"

Mark Mahaney, an analyst at RBC Capital Markets, said this decline creates a rare opportunity to buy shares of Facebook.

"Facebook still holds two of the most important media in the world (Facebook and Instagram) and the two largest messaging assets in the world (Messenger and WhatsApp), "said Mahaney in a note to customers, adding that he sees" no important change in marketing views of the attractiveness "of Facebook platforms.