Ad revenue drops….
More money going back into the company instead of profits….
Facebook’s stock took a beating Wednesday — before being utterly pummeled.
Immediately following the company’s disappointing earnings report— in which it reported worse-than-expected user growth and revenue — investors sent its shares down more than 10%. Then, during the company’s earnings call with investors, the shares fell even more as CEO Mark Zuckerberg and his colleagues warned of slowing revenue growth and increased expenses in the months ahead.
At one point, the company’s stock was down nearly 24%, and its valuation had fallen by a whopping $148 billion. That’s about as much as the combined market capitalizations of IBM and Snap — and around the same amount as the total gross domestic product of Hungary….
Zuckerberg warned that the company would continue to make investments going forward, not only in safety and security measures to prevent things like the Russian disinformation campaign seen in the 2016 election, but also in new products and services. Those investments weighed on the company’s profitability in the second quarter and presumably will in coming quarters as well….
On a personal level, Zuckerberg’s fortune evaporated by $16 billion in one day. And yet, he has bigger problems to worry about.
This month, Trillium Asset Management, a Facebook investor owning about $10 million worth of company shares (after Wednesday’s crash), drafted a proposal to fire Zuckerberg as the company chairman, criticizing his “mishandling” of crises like the Cambridge Analytica data breach and the Russian meddling in U.S. elections…..