Tuesday, 16 October, 2018

Facebook just had the worst day in stock market history

Thumbs down on Facebook results Facebook shares sink 8% as Q2 revenue and user growth misses analyst estimates
Andy Castillo | 28 July, 2018, 19:49

The plunge came after Facebook executives said the company expected a significant slowdown in its revenue growth in the years ahead.

That "bombshell", as one analyst termed it, played into concerns on Wall Street that Facebook's model could be under threat after a year dominated by efforts to head off concerns over privacy and its role in global news flow.

Facebook Chief Financial Officer David Wehner said on a conference call with investors that Facebook is "putting privacy first" after the Cambridge Analytica scandal triggered a wave of disgusting press, customer angst and regulatory scrutiny around the world. Facebook's stock price now stands at $176.26, having dropped by a massive 18.9% from the $217.50 value that it stood at before the company's earnings call. Facebook's loss was the biggest single-day drop since it started trading publicly in May 2012.

Shares in Alphabet (:GOOGL.O) closed up 0.7 percent, while those in Apple Inc (:AAPL.O) fell 0.3 percent and Netflix Inc (:NFLX.O) closed barely higher.

After the earnings report, executives worked to explain the potential of Facebook's other properties, not just the main social network, to fuel growth.

Based on the company's recent second-quarter financials, Facebook has a more conservative outlook on the future, expecting revenue growth to decline in the coming years.

He cited currency fluctuations and a shift in usage to features where Facebook shows less advertising or charges less due to lower demand.

Pakistan willing to improve ties with India, says Imran Khan
According to the latest surveys held by Pakistani think-tanks, a neck-to-neck contest is expected between the PTI and the PML-N. Husain Haqqani, a former Pakistan ambassador to the U.S. , said that the result of the election was "foretold".

Now new European data rules could make life tougher for Facebook. Like Facebook, Instagram depends on ads to generate revenue, and Stories is supposed to help sell more ads. But the ongoing scandals have caused many people to take another look, he said.

The new $10 million bump works out to an extra $27,000 a day Facebook is spending on protecting its chief.

Growth in the number of users who logged in each day fell short, too, up 11 percent year-over-year at 1.47 billion but still less than the 1.49 billion anticipated. Commercialisation of those apps is nascent.

"As we have written about extensively, the advertising industry - and digital advertising no less - has limits to growth, which we think is the primary factor constraining Facebook's revenue opportunity", Wieser said in a note after the earnings.

Misinformation on WhatsApp contributing to mob killings in India have added to the pressure on Facebook to re-evaluate how its services maintain security and decorum.

Facebook has shown that it can not sail forever forward while facing various storms, including Cambridge Analytica and the Russian government's use of the social media platform to sow divisions amongst Americans during the 2016 presidential campaign.

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