Facebook has been struggling for years with criticism about its content policies, its failure to safeguard private data and its changing rules for advertisers.
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Facebook has drawn investors because of its fast growth of users and profits.
Investors lashed out at the stock after digesting the company’s weak financial forecast and middling second-quarter numbers delivered after the closing bell yesterday.
However, to put that in another context, the fall does only drag Facebook shares to the price they were trading at on May 4, before a solid rally took its share price to a record high.
Other companies have, in the past, experienced similar plummets on the stock exchange, if not quite as severe as Facebook, who are now battling new data laws and public concern over their privacy policies.
With an hour before trading began Thursday, shares had plunged more than 19 percent, plucking about $17 billion in net worth out of the pocket of Facebook founder Mark Zuckerberg. In the United Kingdom, especially, Facebook drew the ire of lawmakers, who hit the social network with a $650,000 fine, the maximum amount allowable for mishandling user data.
“The bundling of consent for Facebook to use consumer data with access to the platform appears to be an aggressive interpretation of GDPR, and one that might be more subject to eventual regulatory action”, Wieser said. It reported 2.23 billion monthly active users and 1.47 billion daily active users, which were both up 11 percent year-over-year but narrowly missed estimates.
Facebook Inc fell short of analysts’ estimates for monthly active users on Wednesday and reported lower-than-expected quarterly revenue, months after the social network became embroiled in a data scandal affecting millions of users. We’re starting to see that this quarter.
The stock drop, to its lowest levels in almost three months, wiped out almost $120 billion in market capitalization for Facebook and dragged down other internet and tech stocks including Twitter and Snap.
While privacy was an issue in Europe, politics played a role in North America, which is the company’s most lucrative advertising market.
Facebook used to be made out of corporate Teflon. But in addition to this we also have a responsibility to keep building services that bring people closer together in new ways as well. He said the challenges included regaining public trust as well as increasing the number of people joining Facebook and the time they spent on the platform.
Late Wednesday, Facebook warned that its revenue growth will slow down significantly for at least the remainder of the year and that expenses will continue to skyrocket.
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Daniel Ives, head of technology research at GBH Insights, said in a note that investors “clearly viewed Cambridge as a ‘blip on the radar, ‘ although some soft spots in the advertising and overall user metrics will fuel the debate about further bumps in the road” for Facebook.
