Facebook just had the worst day in stock market history

Facebook shares sink 8% as Q2 revenue and user growth misses analyst estimates

Facebook stock dives nearly 20% on warning of slow revenue growth

Immediately following the company's disappointing earnings report - in which it reported worse-than-expected user growth and revenue - investors sent its shares down more than 10%.

Facebook shares have already been through a rollercoaster of ups and downs this year, with the biggest slump coming in April after it emerged data from tens of millions of users had been acquired by Cambridge Analytica.

As an example of its new strategy, Wehner said Facebook will put more development muscle behind the company's Stories feature.

In the second quarter, Facebook lost roughly 1 million monthly users, and 3 million daily users in Europe. The company's sales grew at a 42% clip in the second quarter, so the forecast implies that its growth rate for the rest of the year will be 35% or less.


Slowing revenue growth initially pulled the stock down almost 9 in after-hours trading on Wednesday before losses picked up on the margin outlook. But the ongoing scandals have caused many people to take another look, he said.

The "Dispatches" show featured an undercover reporter who went to work at Irish staffing firm CPL Resources, which acts as Facebook's largest centre for United Kingdom content moderation.

Facebook's stock plummeted following a dire second quarter briefing focusing on slowing ad market growth and increased spending on data security following the Cambridge Analytica scandal and new European Union privacy rules.

Facebook also surprisingly missed on advertising revenue projections, reached $13.04 billion compared with the StreetAccount and FactSet estimate of $13.16 billion.


It was Facebook's lowest user growth rate ever.

While privacy was an issue in Europe, politics played a role in North America, which is the company's most lucrative advertising market.

"I think many investors are having a hard time reconciling that deceleration", Brent Thill, an analyst at Jefferies LLC, told Facebook executives, asking for a little more clarity on the reasoning. In light of increased investment in security, we could choose to decrease our investment in new product areas, but we're not going to - because that wouldn't be the right way to serve our community and because we run this company for the long term, not for the next quarter. The company is also rapidly expanding its real estate around the world to accommodate a hiring spree, which includes thousands of new workers to help combat foreign election manipulation on the site.

Facebook's stumble suggests that some of these stocks - as well as the broader market - could be particularly vulnerable if their financial results don't live up to investor expectations.


Facebook suffered a blow in China on Wednesday when regulators there withdrew their approval of a company innovation hub to support local startups, the New York Times reported on Wednesday, citing a person familiar with the matter.

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