Facebook stock has plummeted after the social media giant’s earnings forecast projected a future revenue drop.
July 26 (UPI) — Facebook stock has plummeted after the social media giant’s earnings forecast projected a future revenue drop.
Facebook stock lost a fifth of its value after an earnings report Wednesday showed declining revenue and slower user growth.
Shares lost more than $110 billion in market capitalization for Facebook and pushed other Internet and tech stocks down.
Facebook Chief Financial Officer David Wehner said the profit margin would fall to the «mid-30s on a percentage basis,» over two years. The operating margin from the second quarter was 44 percent.
Thursday, Facebook stock was down 19 percent and three analysts downgraded the shares’ rating.
«Given the increased near-term uncertainty on revenue growth, slowing user growth, and lower margin forecast, we are downgrading our rating,» Aaron Kessler, one of the analysts, said Thursday.
The decline was noteworthy considering the stock withstood the Cambridge Analytica data breach scandal over the leaking of personal information for as many as 87 million people.
Facebook shares reached a record high weeks ago, pushing CEO Mark Zuckerberg ‘s wealth past investor Warren Buffett ‘s.
Executives had warned that increased security measures over Russian election interference would affect Facebook’s future profitability.
