Facebook in freefall as weak outlook stuns market

Facebook shares fall as user growth slows

Facebook shares fall as user growth slows

Facebook lost more than one hundred billion dollars in market value in a matter of hours on Wednesday after the internet company told investors to expect revenue growth rates to decline for the remainder of the year. It would also wipe his $13.7 billion of gains for the year, leaving him with just less than $70 billion.

Facebook on Wednesday reported second-quarter sales and user growth that fell short of analysts' projections. But revenue - up 42% to $13.23 billion- was slightly below the $13.34 billion that Wall Street was expecting.

Here is one interesting figure; Facebook (NASDAQ:FB) is still stuck at 241 million monthly U.S. & Canada users, and it is the same figure from the last quarter. "We are committed to investing to keep people safe and secure, and to keep building meaningful new ways to help people connect", Facebook CEO Mark Zuckerberg said announcing the company's second quarter earnings.

It's the first time Facebook missed an earnings report since 2015. "This is a clear inflection point for Zuckerberg & Co.as the company's advertising fortress and MAU metrics still look "well intact" despite the massive potential headwinds caused by Cambridge and the overall privacy worries (GDPR) in Europe although challenges remain".

The shift in Facebook's business fortunes follows a series of crises that began in late 2016 with the revelations that it had become a prime distributor of misinformation.

After the General Data Protection Regulation went into effect in Europe, Facebook started asking people to check their privacy settings and make sure they wanted to share certain kinds of data.

Facebook's daily active users for the quarter were 1.47 billion, shy of the 1.49 billion forecast by StreetAccount and FactSet.

The company charted a similar trend in terms of its monthly active users (MAUs) registering 2.23 billion users and an increase of 11 per cent year-over-year as of June 30, 2018.

Trump threatens more tariffs on US trading partners
To date, every time that the Trump administration has imposed a tariff on China, China has imposed an equal tariff on US goods. Those affected economies have in turn targeted US agricultural products, including soybeans, dairy, meat, produce and liquor.

But there's also been a notable slowdown in user growth.

Still, the news caught analysts by surprise after 12 straight quarters in which Facebook exceeded analysts' expectations.

Facebook reported $5.1 billion in profit, or $1.74 per share, compared with the average estimates of $5.1 billion and $1.72 per share among research gathered by Thomson Reuters.

Still, Zuckerberg assured investors that Facebook continues to see growth on its core platform, as well as its other properties, which include Instagram, WhatsApp and Messenger.

That places Zuckerberg, who had been the world's third-richest person, at No. 6, below billionaires including Berkshire Hathaway's Warren Buffett, French business magnate Bernard Arnault, and Zara founder Amancio Ortega.

Zuckerberg said Wednesday that he was hopeful Facebook would be able to limit disinformation and fake accounts, and that the company was able to do so in elections this year in France, Mexico and Germany.

Shares, which had already declined 7 percent after hours, then fell as much as 24 percent after the comments on a conference call with analysts.

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