Markets

Facebook market value plunges $119 billion

Facebook market value plunges $119 billion

Shares plunged 19% on Thursday after executives warned that revenue growth would slow as the company focuses on user privacy.

Investors were spooked by forecasts form the company that revenue growth would continue to decelerate.

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.

The loss is the biggest one-day wipeout of individual wealth ever recorded on the ranking, which started tracking the world's biggest fortunes in 2012.

Investors and insiders turned on Facebook Thursday, sending its stock plunging 20 percent near the end of the market day, costing the company more than $100 billion in value and founder Mark Zuckerberg in excess of $15 billion personally. They believe users have woken up to Facebook's growing list of controversies and made a decision to vote with their "Log Out" buttons.

Facebook said that it brought in adjusted earnings of about $1.74 per share for the period, which was two cents ahead of the Wall Street consensus estimate of $1.72 per share, according to Thomson Reuters.

Meanwhile, investors have also raised concerns that Facebook has reached the limit of how much advertising it can show in its news feed, before finding other places that are as effective to advertise.

Fans pay tribute to Demi Lovato with #HowDemiHasHelpedMe
Demi's fans, whether she inspired them or they are hardcore Lovatics, are sharing the impact the singer has had on their lives. We all know how strong you are Demi . "Her music always speaks to me and helps me to keep going", she tells Newsbeat.


At least 16 brokerages cut their price targets on Facebook after Chief Financial Officer David Wehner startled an otherwise routine call with analysts by saying the company faced a multi-year squeeze on its business margins. That's down from its 17% DAU growth rate a year ago.

Wehner said quarterly revenue growth would be closer to 30 per cent the rest of the year. The company's user base flatlined in its biggest market, the USA and Canada, at 185 million daily users, while declining 1 per cent in Europe to 279 million daily users.

Facebook said the European privacy rules, called General Data Protection Regulation, or GDPR, did not have a big effect on the quarter's revenue, but also noted that they were only in effect for about a month before the quarter ended. Daily active users, meanwhile, grew by just 1.44 percent, compared to 3.42 percent last quarter. Worldwide daily user growth for Facebook's namesake service slid for its sixth straight quarter, bringing it to almost 1.5 billion users in the second quarter.

Facebook said 2.5 billion people were using any of its family of apps each month, including Instagram and WhatsApp.

Revenue from emerging markets has not picked up the slack either. "In the US and Canada, Facebook's daily active users remained flat sequentially at 185 million, while the number actually fell in Europe, falling to 279 million, down from 282 million", writes Fox News.

Rahul Shah, chief executive officer at Ideal Asset Management in NY, a Facebook shareholder, said executives were trying to reset expectations about growth but the outlook caught Wall Street by surprise.


loading...
  • Officials release names of those killed in boat accident

    Officials release names of those killed in boat accident

    The Springfield News-Leader reported that Stone County Sheriff Doug Rader said a tourist boat reportedly sank on Table Rock Lake. There had been wind gusts of more than 60 miles per hour reported at Branson Airport at the time of the tragic accident.
    President Emmanuel Macron leads France's World Cup celebrations

    President Emmanuel Macron leads France's World Cup celebrations

    It was a rousing evening for the president who went through a range of emotions during France's 4-2 victory over Croatia. World Cup Daily: France win the World Cup , but Croatia do themselves proud.
    Tesla Used Red Bull to Hit Model 3 Goals

    Tesla Used Red Bull to Hit Model 3 Goals

    In May 2016, Musk said he estimated the company would make 100,000 to 200,000 Model 3s during the second half of 2017. China's fast-growing market for new-energy vehicles presents a massive growth opportunity for Tesla.
  • Sony announces industry-first 48MP smartphone camera sensor

    Sony announces industry-first 48MP smartphone camera sensor

    Speaking of DSLR, this could effectively kill off the market as the new sensor features a Quad Bayer colour filter array. Usually higher pixel count means lower quality low-light photos, but Sony has managed to merge the best of both worlds.
    Women killed, gunmen in custody after standoff at LA Trader Joe's

    Women killed, gunmen in custody after standoff at LA Trader Joe's

    SWAT teams joined police in surrounding the supermarket during the hostage situation, and the suspect was eventually apprehended. A scary standoff between police and an armed intruder took place at a Trader Joe's location in Los Angeles , on Saturday.
    Bryce Harper wins 2018 MLB Home Run Derby

    Bryce Harper wins 2018 MLB Home Run Derby

    The record of opportunities for excellence available, yet never fully seized, loomed over Harper's Home Run Derby performance. Nationals slugger Bryce Harper was the favorite to win the 2018 Home Run Derby heading into the event, and with good reason.
  • Tesla Sinks on Report That Suppliers Were Asked to Return Cash

    Tesla Sinks on Report That Suppliers Were Asked to Return Cash

    While certainly an ambitious goal given Tesla's history, there's reason to believe that Musk's promise might actually pan out. Tesla's share price is now down 4.22 per cent, after hitting a low of 4.3 per cent in pre-market trading this morning.
    Inspector said he warned duck boat company about problem

    Inspector said he warned duck boat company about problem

    Thirteen of the 21 passengers on board died, including three children. "I don't know if there's a recovery from it", she said. The canopies on top of the vessels make it almost impossible to escape if they are tipped over.
    Trump calls European Union a 'foe'

    Trump calls European Union a 'foe'

    Mr Putin has repeatedly denied that Russian Federation sought to skew the election. "I love those countries". After Glor noted that the European Union was at the top of his list, Trump replied: "I look at them all".
  • Syria blasts evacuation of White Helmets as 'criminal'

    Syria blasts evacuation of White Helmets as 'criminal'

    Those successfully evacuated included about 100 White Helmets , with the rest family members. "Several days ago, U.S. A spokesman for the Israel Defence Forces said the operation was an "exceptional humanitarian gesture".
    Cohen's recording of Trump is a warning sign

    Cohen's recording of Trump is a warning sign

    The Wall Street Journal reported subsequently that the conversation took place in person. McDougal, 47, alleges that she had a 10-month romantic affair with Trump in 2006.
    Trump at Helsinki: Ronald Reagan or Neville Chamberlain?

    Trump at Helsinki: Ronald Reagan or Neville Chamberlain?

    Russian President Vladimir Putin has rounded on United States critics of his summit with President Donald Trump . The cover was released just days after the two leaders' joint press conference in Helsinki, during which Mr.