The previous day security papers of Facebook Inc. fell by 19%, so the company’s capitalization dropped by about 120 billion US dollars. This is the biggest fall for the American company since its founding.
We recall that the company’s shares led this year’s growth of securities among technology companies. The company’s management reported a slowdown in revenue growth and an ever-increasing regulatory pressure. This caused the collapse of the value of shares.
The Financial Times reports that analysts are currently revising models for Facebook Inc., now in modeling not 40% of annual revenue growth but half as much is taken into consideration.
Facebook Inc. published financial statements, according to which the increase in net profit for the second quarter had amounted to 31%, which was less than the market expectations. The company’s revenue has increased by 42% to 13.231 billion dollars.
Facebook warned investors that the growth rate would slow down. There are several reasons for this: a slow growth of advertising revenues and an increase in costs (including due to regulation).
Analysts of the social network give a forecast on profitability for the next few years. In their opinion, this indicator will be equal to 35% (now it is equal to 44%).
The indirect reason for the decline in the company’s stock quotes was the introduction of new rules for the protection of personal data in the European Union, which led to a decrease in the number of active Facebook users in the region by 1%.
A scandal around Cambridge Analytica also had a negative impact.
The material was prepared with the participation of Katya Gordon,
a leading analyst of the brokerage company CT Trade