Wall Street punishes scandal-hit Facebook

Wall Street punishes scandal-hit Facebook

The company's leaders, including its chief executive, Mark Zuckerberg, added that the trajectory was not likely to improve anytime soon, especially as Facebook spends to improve the privacy and security of users.

Facebook shares crashed by 20% in the after-hours trade eroding over $120 billion in its market cap on Wednesday after less than expected Q2 earnings. It would also wipe his US$13.7 billion ($20 billion) of gains for the year, leaving him with just less than US$70 billion ($102.2b). But revenue - up 42% to $13.23 billion- was slightly below the $13.34 billion that Wall Street was expecting. The company is grappling with new data laws in Europe, criticism over its content policies and privacy issues.

Facebook also had 185 million North American DAUs and 279 million European DAUs, below the FactSet forecasts of 185.4 million and 279.4 million respectively.

Zuckerberg's paper losses come after Facebook revealed mixed earnings and slowing growth during the second quarter of 2018.

Facebook founder Mark Zuckenberg, meanwhile, lost $16.8 billion in personal wealth at one point Wednesday on his company's stock downturn, according to Bloomberg Business News.

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The company remains in a dominant position in mobile advertising alongside Alphabet Inc's Google.

About 2.5 billion people use at least one of the company's apps each month, Facebook said on a conference call with investors and analysts.

After the General Data Protection Regulation went into effect in Europe, Facebook started asking people to check their privacy settings and make sure they wanted to share certain kinds of data.

Analysts had estimated a profit of $1.72 per share, on revenue of $13.36 billion.

Worldwide daily user growth for Facebook's namesake service slid for its sixth straight quarter, bringing it to almost 1.5 billion users in the second quarter.

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After the earnings report, executives worked to explain the potential of Facebook's other properties, not just the main social network, to fuel growth. Facebook has largely saturated in the United States and Western European markets, and is now looking to countries such as Brazil, India and Indonesia for new users.

Facebook warned that a slowdown in revenue growth will continue through the second half of 2018, with expenses soaring 50% to 60% year over year.

Facebook's 2.23 billion monthly active users and 1.47 billion daily active users were both up 11 percent from past year but also just shy of analyst predictions of 2.25 billion and 1.48 billion, respectively. It owns three other properties with more than 1 billion users: WhatsApp, Messenger and Instagram.

Unfortunately, the stock market frowned heavily on the slow growth rates, pushing Facebook's share price down over 7 percent in after-hours trading to around $200 per share.

Zuckerberg said Wednesday that he was hopeful Facebook would be able to limit disinformation and fake accounts, and that the company was able to do so in elections this year in France, Mexico and Germany.

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