Facebook shares plunge as growth stalled by scandal

Facebook shares plunge as growth stalled by scandal

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. That figure includes some $2.7 billion in cash and real estate, according to Bloomberg's Billionaire index. Fourteen analysts surveyed by Zacks Investment Research expected $13.4 billion.

The social media site had a rough hump day as the company was below the mark with its sales and its global daily active users during its second quarter of fiscal 2018, due in part to the slew of data leaks and fake news fiascos that plagued the company during the period. But revenue - up 42% to $13.23 billion- was slightly below the $13.34 billion that Wall Street was expecting.

But the number of people who use the network every day, representing Facebook's most devoted users, remained flat in the U.S. at 185 million.

Shares plunged as much as 24 percent after Chief Financial Officer David Wehner said revenue growth rates would decline in the third and fourth quarters.

Facebook announced its Q2 2018 financial results on Wednesday - and in a rare miss, it failed to hit Wall Street's expectations.

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

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Pressed by analysts who expressed surprise at the warning, Wehner said that operating margin would be hurt by factors including currency exchange rates and the introduction of new advertising products like the "stories" feature on Facebook and Instagram.

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. The company's user numbers also came below expectations, with the growth in monthly users stalled in the U.S. and down slightly in Europe.

Daily user growth for Facebook's namesake service has slid in six straight quarters, bringing it to 1.47 billion users in the second quarter from 1.23 billion at the end of 2016 when it became embroiled in political issues. The new privacy law forced several changes to Facebook's privacy terms and sign-up process, leading a minority of users to opt for non-personalized ads, which tend to generate less revenue. Analysts projected $13.3 billion.

Facebook said it had 1.47 billion daily active users in June, compared with the 1.48 billion average of analysts' estimates compiled by Bloomberg.

The social network fessed up to the exodus during its second-quarter earnings on Wednesday, admitting that the implementation of GDPR saw it lost a good swathe of European users. The company owns three other properties with more than 1 billion users: WhatsApp, Messenger and Instagram. Given all the questions about the misuse of the platform, "to explain that there are a couple million people who chose not to continue using Facebook is unsurprising", said Brian Wieser, an analyst at Pivotal Research.

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