James Alexander Michie: Facebook suffers a significant drop | Bloomberg
Author: James Alexander Michie
After months of scandal and millions of criticisms, Facebook Inc. was affected in such a way that it plummeted to 20% which was a low blow for the company despite everything indicating that the financial returns of social media did not they were affected by the criticism they could receive due to their content policies, their lack of safeguarding of private data and the rules that were in continuous changes for advertisers. However, in a surprising way Facebook communicated about sales and the figures of increase of users for the second quarter, they did not reach the projections of the analysts which caused a certain tendency of fear for their investors.
Likewise, the company told Wall Street that its figures will not improve in the remainder of the year since CFO David Wehner assured that during the third and fourth quarters the growth rates of revenues would probably decrease significantly. In fact, its shares were affected by its further decline as a public company, eliminating more than $ 120 billion in market value, positioning itself as the largest cost loss in a day for a company marketed in the United States.
There is no doubt that many investors have been shocked by this fall, as analysts who follow the company frequently inquired through a conference call with executives to acquire more information about how the company’s economic future had changed in a way so surprising and significant.
The company believes that part of what happened was influenced by the implementation in Europe of strict new data laws, which resulted in fewer daily visitors in that region, likewise Facebook received millions of criticisms regarding its political content specifically in countries like Myanmar and Sri Lanka coupled with this the company continued to receive heavy blows due to the consequences of investigations regarding the Russian manipulation of the platform while the 2016 presidential elections took place.
Facebook which is a social network that has 2.23 billion monthly and active users apparently cannot increase forever, since its main platform is decreasing.
It is estimated that the increase in the company’s income would probably decline due to winds against the currency, more investments in new types of attachment exchanges, the fading of videos and greater user control over privacy.
Source: Sarah Frier | Bloomberg
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