Facebook Shares Tumble 23% After Privacy Saga
Facebook shares have plummeted a further 23 per cent after close from the company admitting to its growth slowing down.
This drop wipes approximately US$130bn from Facebook’s market value if it holds until open.
Facebook second quarter revenue has fallen short of analysts expectations as the Cambridge Analytica scandal continues to haunt the social media giant.
Revenue for Q2 came in at US$13.23bn up 42 per cent however, analysts predicted it at $13.36bn.
Its income from operations grew 33 per cent at US$5.63bn and net income was at US$5.1bn.
Mark Zuckerberg, CEO at Facebook says, “Our community and business continue to grow quickly. We are committed to investing to keep people safe and secure, and to keep building meaningful new ways to help people connect.”
Facebook shares were punished yesterday on the back of news that growth in users and revenues were down, with further slow downs and increased costs projected over the coming months.
Its US and Canada daily active users (DAU) were grew 11 per cent at 185 million however DAU in Europe fell from 282 million to 279 million which could be attributed to the fact the EU privacy law went into affect over the second quarter.
After the release of the company’s earnings report shares dropped more than 10 per cent, spooking investors with poor user and revenue growth figures.
Facebook continued to plummet after Mark Zuckerberg released a statement warning of slowing growth and increased upcoming expenses.
At the end of trading, shares were valued at US$173.51 having shed US$43.99 per share representing 20.2 per cent.
Currently, Facebook is at US$217.50, up 1.32 per cent.
Read the full report here.