The slower growth comes as the company grappled with privacy scandals.
"Our community and business continue to grow quickly".
For numerous world's richest people, losing $16.8 billion in a day would be a wipeout. If that loss holds through Thursday's close, he will slip to sixth place from third in the Bloomberg Billionaires Index. "There are always going to be these one-day disasters". But the sell-off points to growing concerns that Facebook will not emerge unscathed from the many controversies it faces.
Its gloomy forecast for revenue growth surprised investors, though, and prompted many questions from financial analysts on a conference call with company executives on Wednesday.
In the wake of the Cambridge Analytica data-privacy scandal, "Legal/regulatory developments have led to changes meant to support FB's platform and users, but they will notably restrain growth and profits for at least the next couple of quarters, in our opinion", Scott Kessler of CFRA Research wrote in a note. Amazon.com fell 2.8 per cent ahead of its own results, which boosted its shares again in after-hours trading. In case of the latter, Wehner noted that "total expense growth will exceed revenue growth in 2019", pushing down operating margins.
Even with the stock selloff, Facebook remains massively profitable and has a growth profile traditional media companies would kill for. "Instagram has over 1 billion users, and all Facebook apps (Facebook, WhatsApp, Messenger, and Instagram) have 2.5 billion unique monthly users".
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Though Iranian President Hassan Rouhani said Wednesday there was no need for him to "respond to any nonsensical comment", Gen. Rouhani recently warned the US that war with Iran is "the mother of all wars ". "We are ready to stand against you".
According to techcrunch.com, it seems as if Facebook announced the stat in hopes of deflecting attention from the fact that its user count shrank in Europe and was flat in the United States and Canada, contributing to extraordinarily low monthly and daily user growth. A couple of months ago Facebook saw 1 million users leave its ranks over the General Data Protection Regulation in Europe.
Net income was $5.11 billion, or $1.74 a share, beating analysts' estimate of $1.71 a share.
But Facebook's recent woes appear to be more than just a temporary bump in the road. Controversies came and went, but nothing stuck.
Facebook Inc and its chief executive Mark Zuckerberg were sued on Friday (July 27) in what could be the first of many lawsuits over a disappointing earnings announcement by the social media company that wiped out about US$120 billion (S$163.43 billion) of shareholder wealth. When Facebook warned of slower growth it tipped the balance, sending the stock tumbling.
The stock market collapse came after the company warned investors to expect a significant decline in growth rate, and revealed that the number of users in Europe had fallen from 282 million to 279 million. "The big story was around expectations of deceleration in [the second half of 2018]", he wrote in a research note.