Facebook (FB) Stock Sinks as Revenue Misses Expectations

Facebook lost more than $100 billion US in market capitalization in early trading Thursday

Facebook lost more than $100 billion US in market capitalization in early trading Thursday

Zuckerberg, Facebook's CEO, lost $16 billion in net worth due to the drop, according to Fox News. If that holds through Thursday's close, he will slide to sixth place from third on the Bloomberg Billionaires Index.

And slower growth on the primary Facebook platform doesn't overshadow growth on its other holdings, they say.

The company also said that revenue growth from emerging markets and the company's Instagram app, which has been less affected by privacy concerns, would not be enough to fix the damage. Those problems hadn't mattered to the success of the business - until now.

While gargantuan in sheer number, the drop in Facebook's market value doesn't spell the end for the company.

On the whole, Facebook complied with the GDPR and made its advertising policies more clear. Twitter was down 6 percent, Amazon and Google 2 percent and Apple 1 percent. "It just seems like the magnitude is beyond anything we've seen".

RBC Capital Markets analyst Mark Mahaney said the drop creates a rare buying opportunity for Facebook shares.

The company posted $13.23 billion in revenue for the second quarter, missing estimates of $13.36 billion.

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The second-quarter results were the first sign that a new European privacy law and a succession of privacy scandals involving Cambridge Analytica and other app developers have bit into Facebook's business. And it continued to suffer fallout from investigations into Russian manipulation of the platform during the 2016 US presidential election. "Our view is that the company is far from out of the woods", Brian Wieser of Pivotal Research said. Analysts were expecting $2.1 billion, according to Thomson Reuters. Lastly, combine all these with the company's decision to experiment with "Stories" and try to coax advertisers towards the platform at a time when its bases appear uncovered does not sit well for investor sentiment.

"Looking beyond 2018, we anticipate that total expense growth will exceed revenue growth in 2019", he said. "W$3 hile the company is still growing at a fast clip, the days of 30%+ [revenue] growth are numbered", he wrote.

The "Dispatches" show featured an undercover reporter who went to work at Irish staffing firm CPL Resources, which acts as Facebook's largest centre for United Kingdom content moderation. Facebook is rolling out a version of those protections to the rest of the world.If users choose to share less data with Facebook, that could hamper the company's ad-targeting abilities, making it less attractive to marketers.

More likely, though, market buzzards are holding off because of how quickly some analysts are turning on the company. Apparently, Facebook believes we are too stupid to know what's best for us, and that a computer algorithm will do a better job of choosing what we should see, than we could do for ourselves.

On the call, Jefferies & Co. analyst Brent Thill said that "many investors are having a hard time reconciling that deceleration". In light of increased investment in security, we could choose to decrease our investment in new product areas, but we're not going to - because that wouldn't be the right way to serve our community and because we run this company for the long term, not for the next quarter. "Real world issues that people thought should affect the company are now affecting the company". $130 billion had been wiped off of Facebook's market cap as a result of the stock's plunge.

For the second quarter, profit was up 31 percent at $5.1 billion; revenues rose 42 percent to $13.2 billion, only slightly below most forecasts.

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