Sunday, 19 August, 2018

Putting Mark Zuckerberg's $16.8 billion wipeout into perspective

Facebook shares fall as user growth slows Facebook Stock Down 9% Following Q2 Revenue Miss, Slowing User Growth
| 26 July, 2018, 13:25

Chief financial officer David Wehner told analysts in a follow-up call to brace for a possibly deeper slowdown as the company seeks to expand new offerings such as Stories and increase privacy and security for users.

Bloomberg reports if that holds through Thursday's close, he will slide to sixth place from third on the Bloomberg Billionaires Index.

The Menlo Park, Calif. -based company reported second-quarter earnings that bested analyst estimates, but the results fell short of projections for revenue and daily active users. Revenue increased 42 percent to $13.2 billion, missing the $13.3 billion Wall Street consensus.

The social media company has contended for years with criticism about its content policies, its failure to safeguard private data and its changing rules for advertisers.

Only months after a data privacy scandal, Facebook is seeing fewer frequent users than it expected, according to CBS News.

Wehner said revenue growth "decelerated" in the second quarter and will decline "by high single digit percentages" and added that "we are also giving people who use our services more choices around data privacy which may have an impact on our revenue growth". "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.

What is your opinion over Facebook's Q2 2018 earnings? Instagram's business model is so far the most mature, and likely contributed meaningfully to the company's revenue in the quarter, analysts have said, though Facebook doesn't break out sales for the app.


Daily active users reached 1.47 billion, and once again, these numbers could haunt Facebook (NASDAQ:FB) as growth reached a low 1.44 percent compared to Q1's 3.42 percent.

There's a scratch in Facebook's Teflon coating as the social networking company loses approximately US$150 billion ($219b) in market capitalisation in under two hours, Reuters has reported.

The General Data Protection Regulation (GDPR) in the European Union also will cause a revenue drop. Facebook said mobile made up 91 per cent of ad revenue in the recent period, compared with about 87 per cent a year earlier.

The update showed the key metric of monthly active users rose 11 per cent to 2.23 billion, below most estimates of 2.25 billion, while daily active users grew a weaker-than-expected 11 per cent to 1.47 billion.

Shares in the technology company and publisher plunged by nearly 25 per cent in late trading after David Wehner, chief financial officer, said that Facebook's revenue growth would decelerate in the second half of the year and expenses would soar in 2019.

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. Together, the entire Facebook suite of products has 2.5 billion unique monthly users, the company disclosed for the first time. The company said headcount was 30,275 as of June 30 - an increase of 47 percent year over year.

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