Shares of Facebook continued to plunge Thursday, wiping more than $100 billion from its market cap in just hours after the company's CFO forecast a significant drop in revenue growth and margins in the coming quarters. "Looking beyond 2018, we anticipate that total expense growth will exceed revenue growth in 2019," said Chief Financial Officer David Wehner on a conference call Wednesday. "Over the next several years, we would anticipate that our operating margins will trend towards the mid-thirties on a percentage basis." Wehner's comments on the conference call came after Facebook said revenues grew less than expected in the second quarter, and its user count missed estimates. The statements accelerated losses in the stock, which was down as much as 24 percent after hours. "\[We see\] substantial legal and regulatory issues, and really structural changes in the business model, that we're going to see evolve over the next couple quarters at the least," said CFRA analyst Scott Kessler. In the first earnings report to cover a full quarter since the Cambridge Analytica scandal broke, the social media network said monthly active users grew 11 percent from a year ago to about 2.23 billion people, though analysts were looking for 2.25 billion. Users in the U.S. remained at 241 million, the same level as at the end of March, while users in Europe fell for the first time. "I think we've hit a point with Facebook where user growth is just going to slow down," said Jason Moser, analyst at Motley Fool, in an interview to Cheddar. Revenues came in at about $13.2 billion for the quarter, also short of estimates. The company has been plagued by criticism over how it handles user data for months, and CEO Mark Zuckerberg has not only issued several rare public apologies but even testified before Congress on the issue. Facebook was also hit with calls to better police the content on its platform, most recently after the company refused to take down a post from right-wing conspiracy theorist Alex Jones, threatening Special Counsel Robert Mueller. Ad sales rose 42 percent during the quarter but were outpaced by a 50 percent increase in costs, driven by added efforts to address those issues. Facebook's stock drop, the biggest on a percent basis ever for the company, erased all the gains it had made since its last earnings report three months ago. The loss in market value was bigger than the entire market cap of IBM, McDonald's, and Nike. The results put pressure on the entire tech landscape, with shares of Amazon, Twitter, Snap, and Google parent Alphabet all falling in sympathy. Quick facts from Facebook's Q2 earnings report: * Earnings per share: $1.74 vs. $1.72 estimate * Revenues: $13.23 vs. $13.36 billion estimate * Monthly active users: 2.23 billion vs. 2.25 billion estimate * Daily active users: 1.47 billion vs. 1.49 billion estimate * Monthly active users in Europe fell for the first time * Mobile ad revenue accounted for 91 percent of all ad revenue * Ad revenue grew by 42 percent, but costs grew by 50 percent For full interview, [click here](https://cheddar.com/videos/facebook-earnings-drop-as-much-as-10-after-slight-revenue-miss)

Share:
More In Technology
Digital GCOIN Gives Users Ownership of Pure Physical Gold
After months of investors turning to crypto as a hedge against inflation, instead of the traditional hedge of gold, one crypto exchange is working with a token creator to launch a digital coin backed by a physical asset. GCOIN gives customers a digital title of ownership to 99.99% pure physical gold which is stored in a secured vault. Brent de Jong, GCoin's founder and Kristin Boggiano, Co-Founder and President of CrossTower, a cryptocurrency exchange, join Cheddar News' Closing Bell to discuss the GCOIN rollout, customer interest, why crypto is used as an inflation hedge, and more.
Foxtrot Raises $100 Million to Accelerate National Retail Expansion Of Its Digital-First, Omnichannel Corner Store
Retail platform operator and delivery company, Foxtrot, raised $100 million in a Series C round led by D1 Capital Partners. Foxtrot bills itself as the modern convenience store that combines what it calls in-store curated discovery with 30-minute delivery and 5-minute pickup. Since launching first as a digital-only delivery service, the company has since grown into a popular local retailer, opening 16 brick and mortar locations across Chicago, Dallas, and Washington, DC. Foxtrot co-founder and CEO Michael LaVitola joined Cheddar News' Closing Bell to discuss.
Jan. 6 Committee Subpoenas Big Tech for Information on Capitol Insurrection
The January 6 committee has subpoenaed four tech giants for more information on what they did and didn't do leading up to last year's deadly Capitol insurrection. Google, Facebook, Twitter, and Reddit were asked to assist the investigation in August, but the committee says their responses have been 'inadequate.' Craig Timberg, a national technology reporter at the Washington Post, joins Cheddar News' Closing Bell for more details about the subpoenas, why this is happening now, and how it might impact social media companies moving forward.
When Apple Might Enter the Virtual and Augmented Reality Race
As Meta and Microsoft ramp up their AR and VR tech futures, analysts have been waiting on word from Apple, but the consumer tech giant is reportedly delaying such an announcement. Doug Astrop, a managing partner at Exponential Investment Partners, joined Cheddar to dive into the rumors about the possibilities of a foray into the metaverse by Tim Cook's megacorp sometime in 2022 or 2023. "We can't really predict with a great deal of certainty how it's going to play out, but I'm confident Apple's going to be a big player and do very well in any scenario that unfolds," said Astrop.
Supply Chain Automation Company Symbotic on Going Public Via SPAC With SoftBank
Specializing in AI, robotics, and automation for the global supply chain, Symbotic announced last month it will be tapping the public markets in a SPAC deal with investment giant SoftBank. Symbotic CFO Tom Ernst and Vikas Parekh, a managing partner at SoftBank Investment Advisers spoke with Cheddar about going public and the future of modernizing logistics amid the constrained supply networks. "The supply chain is fundamentally broken," said Ernst. "By employing the best in modern technology for autonomous vehicles and artificial intelligence, we're able to fundamentally rethink the way in which you receive and store and sort goods, making for a dramatically more efficient supply chain."
Markets Open Higher on First Trading Day of 2022
Markets opened higher on the first trading day of the new year as investors continue to watch inflation and the rapid spread of the omicron variant in the U.S. Frances Newton Stacy, Optimal Capital Dir. of Strategy/Market Analyst joined Cheddar's Opening Bell to discuss.
Load More