WSL announced that to ensure fans get to see all the action from the Tahiti Pro, the WSL would revert to streaming content through its website, mobile apps and smart TV’s and also on Facebook Live. It’s a welcome return to traditional viewing for fans of the WSL and also timely. Last month, Facebook’s market value dropped by $120 billion — the largest ever corporate loss in history — when it announced that growth would slow. In Europe, Facebook announced it dropped by 3 million daily users and 1 million monthly users since the first quarter.
FB stock closed down 19% which means that investors erased the entirety of the company’s 2018 gains. Its market capitalization was $510 billion and 170 million shares had changed hands. Facebook’s slump was the ugliest decline since the company went public in 2012.
Facebook stock had recovered from a decline earlier this year in the wake of the Cambridge Analytica scandal, one of several controversies and warning signs that the company had managed to weather with little damage to its stock. But declining revenue and user growth, topped by a warning from executives that it will continue, seemed to end that run.
Profits were not what rattled investors, though. Facebook recorded sales of $13.04 billion, a 41.9% increase from a year ago, but that was lower than analyst estimates and previous growth rates. User growth was flat in the U.S. and Canada, and declined in Europe from the previous quarter. But the stock didn’t fall off a cliff until Chief Financial Officer David Wehner disclosed that the social-media giant expects the revenue-growth slowdown to continue.
“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,” he said on the conference call. Wehner also said Facebook still expects expenses to grow 50% to 60% from last year.
The company disclosed that its head count has increased 47% to 30,275 since the year-earlier period, part of that outsize spending. “As I’ve said on past calls, we’re investing so much in security that it will significantly impact our profitability,” Zuckerberg said. “We’re starting to see that this quarter.”
Even though Ives says that the quarter was far from disastrous — it was decent with a few rough patches — he expects investors to continue punishing the stock in the near-term.
“The quarter itself had geographic soft spots and disappointed the bulls,” Ives said. “There are a lot of natural headwinds [Facebook is] seeing, this is going to be one quarter that puts the stock in the penalty box for a while until they can prove that advertising tailwinds and user growth are back on the right track.”
Facebook’s numbers in Europe declined in large part due to the European Union’s General Data Protection Regulation, which went into effect during the quarter. Zuckerberg and other executives said GDPR was the reason for Europe’s slowing user count. It dropped by 3 million daily users and 1 million monthly users since the first quarter.
“We did see a decline in monthly activities 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 want us to use context, including from websites this they visit, to make our ads more relevant and improve their overall product experience,” Zuckerberg said on the earnings call with analysts.
The one saving grace for Facebook could be continued support from advertisers. Less subject to the quarterly demands of investors, advertisers aren’t yet seen as planning to ease back on Facebook budgets.
As Facebook stock plummeted, it also brought social-media rivals Twitter Inc and Snapchat parent company Snap Inc to the party.
VIA PRESS RELEASE