Published: Fri, July 27, 2018
Markets | By Erika Turner

Facebook market value plunges $119 billion

Facebook market value plunges $119 billion

Facebook Chief Financial Officer David Wehner said on a conference call with investors that Facebook is "putting privacy first" after the Cambridge Analytica scandal triggered a wave of frightful press, customer angst and regulatory scrutiny around the world.

According to, it seems as if Facebook announced the stat in hopes of deflecting attention from the fact that its user count shrank in Europe and was flat in the U.S. and Canada, contributing to extraordinarily low monthly and daily user growth.

Splash page for the Internet social media giant Facebook. Its stock was trading at $176.26 late Thursday, down from $217.50 a share before the report was released. The social media company has contended for years with criticism about its content policies, its failure to safeguard private data and its changing rules for advertisers.

Despite the focus on Facebook's role in the affair, its shares have increased 23 percent since the beginning of the year, compared with a 6.5 percent rise for the Standard & Poor's 500 index.

Advertising revenue for the quarter was $13.04 billion, missing analyst forecasts of $13.16 billion. Stamos reportedly still plans to leave the company next month, following a reorganization that the New York Times said earlier this year took away 98% of the group he managed.

"With or without privacy issues, investors are scared that Facebook´s interactions, particularly with those under 25, are falling", Sheehan said. Facebook's daily active users in Europe fell by three million in the quarter amid the new regulation. US and Canadian traffic was flat from the previous quarter, while Europe shed 3 million average daily users quarter over quarter, down to 279 million.

Also alarming to investors: Facebook's growth is slowing with users in some of its most lucrative markets.

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The key metric of monthly active users rose 11 percent to 2.23 billion, below most estimates of 2.25 billion, while daily active users grew a weaker-than-expected 11 percent to 1.47 billion.

Revenue from emerging markets has not picked up the slack either.

However, the company faced trouble growing its user count in its two biggest markets, Europe and the US.

Although Facebook's Q2 earnings report showed that it missed earnings and user growth expectations by only slim margins, investors may have been looking for a reason to run.

The threat of additional privacy regulatory setbacks remains a concern, according to analysts.

The company reported its second-quarter earnings after the bell on Wednesday. Misinformation on WhatsApp contributing to mob killings in India have added to the pressure on Facebook to re-evaluate how its services maintain security and decorum.

Facebook has continued to suffer fallout from investigations into Russian manipulation of the platform during the 2016 U.S. presidential election.

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