Facebook shares down more than 18 percent

Facebook shares down more than 18 percent

Facebook shares down more than 18 percent

Facebook reported US$5.1 billion in profit, or US$1.74 per share, compared with the average estimates of US$5.1 billion and US$1.72 per share among research gathered by Thomson Reuters.

That means that in one day, just the decline in Facebook's market value is roughly the entire market value of McDonald's or Nike, give or take a few billion.

Facebook has lost around one million users in Europe thanks to new data protection regulations.

Despite the rocky quarter, Facebook shares had hit an all-time high before Wednesday's earnings report and its quarterly revenue was still up 42 percent from this time previous year.

Facebook's stock dropped by a whopping 24% after it announced its second-quarter financial results on Wednesday.

Overall, technology giants - Facebook, Apple, Google, Amazon and others - have enjoyed nearly unprecedented growth in revenue and stock price for years.

While privacy was an issue in Europe, politics played a role in North America, which is the company's most lucrative advertising market. Piper Jaffray hiked their outlook to $2,100 from $2,075 and Wedbush raised its price target to $2,100 from $1,800. "In our view, the sell-off is overdone and largely unwarranted".

Meanwhile, other observers think the technology expert may be in over his head when it comes to the many other aspects of his global business. That surprised investors because of the belief that the new laws wouldn't hurt revenue.

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

Until now, he said, there was a sense that the vast majority of users didn't fully understand Facebook's business. In March, the company's handling of user data in the Cambridge Analytica scandal contributed to a backlash against the size and reach of the biggest tech businesses and raised concerns that regulators may soon crack down on these firms.

Facebook's growth is slowing with users in some of its most lucrative markets.

But Wehner said the product has "lower levels of monetization", while adding that the company plans to invest in growing the service. "That's going to have a negative impact on revenue growth", he noted. Yet both categories are facing headwinds. "Facebook's Chief Financial Officer warned that revenue growth would "decline by high single-digit percentages" until 2019".

Investors closely watch operating margins because they serve as an important metric for profitability.

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The company said for the first time that more than 2.5 billion users interact with at least one of its apps each month, but analysts have said many of them are spending more time with Messenger, WhatsApp and Instagram.

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