Facebook's stock dives 20% on dire predictions following second-quarter financials

27 July, 2018, 10:38 | Author: Martin Tyler
  • Facebook shares sink 8% as Q2 revenue and user growth misses analyst estimates

It was Facebook's worst trading day since going public in 2012; the collapse eclipsed Intel Corp.'s decline of US$91-billion in September, 2000, without adjusting for inflation. Then came the plunge in after-hours trading, after the company revealed it had 2.23 billion monthly users in its last quarter, up 11 per cent from last year's level, but well short of what industry analysts had been expecting. It reported revenue of $13.2 billion for the quarter, missing Wall Street estimates and rattling investors.

Facebook reported on Wednesday that growth in digital advertising sales and in the number of its users had decelerated in the second quarter.

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. Stamos reportedly still plans to leave the company next month, following a reorganization that the New York Times said earlier this year took away 98% of the group he managed.

Facebook shares sink 8% as Q2 revenue and user growth misses analyst estimates

On Wednesday the initial fallout from Cambridge Analytica appeared in Facebook's financial results and forecast and it was a game changer.

During the call, Facebook Chief Executive Mark Zuckerberg tried to recast the disappointing earnings.

Facebook has also faced public image problems because of the way Russian Federation used the site to try to influence the 2016 USA presidential election.

Farmers prefer Trump do trade deals than hand them cash
To date, every time that the Trump administration has imposed a tariff on China, China has imposed an equal tariff on USA goods. Many Wisconsin politicians are echoing that sentiment, saying payback for trade tariffs is not the way to go.

Shares in other technology companies were dragged down by the social media giant, as the technology sector fell 1.9%.

On a call after the results were issued, Zuckerberg reportedly said: "We are investing so much in security that it will have a significant impact on our profitability".

All of this was enough to spook investors in the shares on the Nasdaq when the market opened on Thursday morning. If the sell-off hits those levels in Thursday trading, it will mark one the largest collapses in value ever suffered by a US -traded company in a day.

USDA commits $12B for farmers, ranchers affected by tariffs
Some of Trump's fellow Republicans are also already balking at the idea of government-funded bailout for a trade war they oppose. The program is expected to start taking effect around Labor Day in the USA on September 3.

"It wouldn't be surprising if a couple million very irritated Brits left Facebook", says Brian Wieser, analyst with Pivotal Research.

"The company has a track record of resetting revenue growth and expense expectations only to turn around and exceed those expectations the following quarter", said Gene Munster of Loup Ventures. Like Facebook, Instagram depends on ads to generate revenue, and Stories is supposed to help sell more ads.

In contrast to Facebook, Amazon on Thursday in the U.S. reported a record profit and forecast plowing past analyst estimates.

Los Angeles police report possible hostage situation at Trader Joe's
During that shooting, the suspect crashed into a pole near the Trader Joe's in the 2700 block of Hyperion Avenue. "My baby sister. As the drama unfolded, President Donald Trump tweeted that he was "watching Los Angeles possible hostage situation very closely".

The site also brought in 1.47 billion global daily active users (DAUs) during its second quarter, below the 1.49 billion that analysts were projecting, according to a StreetAccount and FactSet outlook.

Recommended:



Popular

Turkey rejected United States call to abide by anti-Iran sanctions
Brunson has lived in Turkey for 23 years and served as pastor of Izmir Resurrection Church , a small Protestant congregation. More than 50,000 people were arrested in Turkey in President Recep Tayyip Erdogan's huge post-coup crackdown.

21st century's longest lunar eclipse on Friday: Bengaluru gears up
The atmosphere scatters blue light more strongly, meaning the light that reaches the lunar surface is predominantly red in colour. Before we had explanations before what causes the moon to appear red, ancient cultures often feared the worst.

Trump calls for quick NAFTA deal in letter to Mexico president-elect
The U.S.is now gearing up for mid-term congressional and senate elections in November. "I don't think it's going to happen". Trump's tariffs on steel and aluminum imports were still casting a shadow on NAFTA talks, Morneau said.

Aaron Ramsey reveals Unai Emery's pre-season changes
For me, he's a very good person, a very good professional and he has a lot of experience in the football world. He is growing up in the academy, and we need to give young players the opportunity to play matches like today.

New U.S. Russia sanctions push slows in Congress before recess
Congress reached an agreement this week laying out conditions under which Trump can seek a waiver for allies. But he said, without offering evidence, "they will be pushing very hard for the Democrats".

Thomas in yellow, Froome slips, Martin finishes second
His track record ensures that Froome remains number one at Team Sky but it is Thomas who is inexorably heading towards victory. Dutchman Dumoulin leapfrogged defending champion Froome into second, after a decisive attack 2 kilometres from the finish.

Fans pay tribute to Demi Lovato with #HowDemiHasHelpedMe
US Weekly reports that Lovato's mother, Dianna De La Garza, "has been at her side since the hospitalization". Lovato got her start in entertainment at age ten as a regular on the children's series "Barney & Friends".

Hundreds of 'White Helmet' rescue workers are evacuated from Syria
We therefore took steps with the aim of affording that protection to as numerous volunteers and their families as possible. United States officials said the volunteers at the border were likely to be targeted by the government advance.

Trump legal team waived attorney-client privilege on Cohen recording
Cohen had made a practice of recording conversations, unbeknownst to those he was speaking with. Laws in NY governing the recording of phone conversations do not require two-party consent.

Trump says 'very happy' with progress in NKorea talks
Meari , another propaganda website run by Pyongyang, urged Seoul to do "its part" to formally end the war. Just last week, President Trump said he was "very happy" with how talks were progressing with North Korea.