Facebook Scandals are Starting to Cost them Dearly
The company responded with a sharp dive that at its peak cut the company’s value by about a quarter.
Facebook‘s profits totaled $ 13.23 billion (compared to analysts’ forecasts of $ 13.3 billion). The number of active users per month is 2.23 billion users, an increase of 11% compared to last year, but analysts predicted 2.25 billion users. Facebook has been able to miss analysts‘ forecasts for the daily active user volume of 1.47 billion users, an increase of 11% compared to last year, but predicted 1.48 billion users.
During the conference, CFO Dave Wooner explained that “we expect growth to continue to decline during the second half” in “single high digits”. In the course of 2017 Mark Zuckerberg repeatedly claimed that Facebook’s investment in security and privacy would damage the social networking business in the short term, and he probably did not make a mistake. “As I said in previous conversations, we invest so much in privacy, and this is going to hurt our profitability significantly. We are starting to see this in the current quarter, “Zuckerberg said.
Not only did the number of active daily users not grow in the United States, the most important advertising market for Facebook, but in Europe the company even lost 3 million users due to the introduction of new privacy laws, GDPR.
If there is one bright spot from the results reported by Facebook, it is in earnings per share of $ 1.74 per share, compared to $ 1.72 per share as predicted by analysts. COO company Cheryl Sandberg claimed that “we are still growing, and expect continued growth at a healthy pace.”
The share price before publication of the financial statements was $ 217 per share, and after the publication began with a free fall, which cost $ 165 per share, a drop of almost a quarter of the share’s value. With the opening of trading in the United States is expected correction, but this is still one of the most difficult nights in the history of the company, which will have to try to prove to investors that its peak before it.