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

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As part of its second quarter of 2018 earnings announcement on Wednesday, the company trumpeted a huge jump in both year-over-year revenue (42 percent) and profit (31 percent). If that loss holds through Thursday's close, he will slip to sixth place from third in the Bloomberg Billionaires Index. It would also wipe his $13.7 billion of gains for the year, leaving him with just less than $70 billion.

The Menlo Park, Calif. -based company reported second-quarter earnings that bested analyst estimates, but the results fell short of projections for revenue and daily active users.

Facebook's daily active users in Europe declined by 3 million amid the new regulation.

In response, Facebook's stock tumbled more than 23 percent in after-hours trading, erasing more than $120 billion in market value in less than two hours.

However, as usual, Wall Street analysts come to the defense of Facebook stock on any pullback whatsoever.

"There is never a "right time" for a transition like this, but the team and the company boast incredible talent and will navigate this well", Stretch said on his Facebook page. "This is a clear inflection point for Zuckerberg & Co.as the company's advertising fortress and MAU metrics still look "well intact" despite the massive potential headwinds caused by Cambridge and the overall privacy worries (GDPR) in Europe although challenges remain".

Pressed by analysts who expressed surprise at the warning, Wehner said that operating margin would be hurt by factors including currency exchange rates and the introduction of new advertising products like the "stories" feature on Facebook and Instagram.

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The company reported net income of US$5.11 billion, or US$1.74 a share, compared with analysts' average estimate of US$1.71 a share, according to data compiled by Bloomberg.

Growth in the number of users who logged in each day fell short, too, up 11 percent year-over-year at 1.47 billion but still less than the 1.49 billion anticipated. The new privacy law forced several changes to Facebook's privacy terms and sign-up process, leading a minority of users to opt for non-personalized ads, which tend to generate less revenue.

For almost two years, Facebook has appeared bulletproof despite a series of scandals about the misuse of its giant social network.

In addition, Facebook said its daily active users rose 11 percent from a year earlier to 1.47 billion, compared with 13 percent growth in the previous quarter.

Still, Zuckerberg assured investors that Facebook continues to see growth on its core platform, as well as its other properties, which include Instagram, WhatsApp and Messenger.

Shares in Facebook plunged more than 20 percent in after-hours trading after the social network warned that it would be less profitable in the years ahead due to shifts in its ad business. The company said headcount was 30,275 as of June 30 - an increase of 47 percent year over year.

About 2.5 billion people use at least one of the company's apps each month, founder Zuckerberg said.

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