Facebook’s stock lost roughly one-fifth of its value in after hours trading on Wednesday following the company’s disappointing earnings report and warning of worse-than-expected user growth.
The social network’s stock dropped about seven percent immediately after the earnings report was released, and then plummeted to a loss of more than 20 percent during the company's call with investors. Its valuation has fallen by $148 billion.
“Our total revenue-growth rates will continue to decelerate in the second-half of 2018, and we expect our revenue-growth rates to decline by high-single-digit percentages from prior quarters sequentially in both Q3 and Q4,” said Chief Financial Officer David Wehner on the conference call. He added that Facebook still expects expenses to grow 50 percent to 60 percent from last year.
The social media giant’s CEO Mark Zuckerberg said on the earnings call with analysts: “We did see a decline in monthly actives in Europe, down by about 1 million people as a result, and at the same time, it was encouraging to see the vast majority of people affirm that though they want us to use context, including from websites they visit, to make our ads more relevant and improve their overall product experience.”
Facebook was trading at $175 per share, down 19 percent, as of 02:44pm GMT on Thursday. The plunge has wiped nearly $17 billion off Zuckerberg's net worth.
It’s the second time this year the company’s stock has taken such a dramatic plunge. Its shares also fell off the cliff in March in the wake of the data breach scandal. Cambridge Analytica, which used the network’s platform, had gained access to the personal data of tens of millions of Facebook users.
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