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

Facebook Inc CEO Mark Zuckerberg's fortune tumbled by US$16.8 billion in late trading Wednesday					Chip Somodevilla  Getty Images

Facebook Inc CEO Mark Zuckerberg's fortune tumbled by US$16.8 billion in late trading Wednesday Chip Somodevilla Getty Images

Chief Financial Officer David Wehner warned Wednesday in an earnings call with analysts that revenue growth had already "decelerated" in the second quarter and would drop "by high single-digit percentages" in coming quarters.

Facebook (NASDAQ:FB)'s European user base declined by 1 million users and as mentioned above, growth remained static in the USA and Canada.

In a sign of just how bullish investor expectations were, though, the collapse merely returned Facebook shares to a level last seen in early May. While the company reported a growth in all markets, its overall revenues missed analyst estimates.

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 company's sales grew at a 42% clip in the second quarter, so the forecast implies that its growth rate for the rest of the year will be 35% or less.

The proof was in Facebook's stock, which during the call was down as much 24% from its price at the close of regular trading.

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.

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Windsor added that Facebook is forced to hire more people to handle tasks such as filtering inappropriate content after discovering the limits of artificial intelligence. The company further warned that the toll would not be offset by revenue growth from emerging markets and Facebook's Instagram app, which has been more immune from privacy concerns.

"The extent of the fallout from the Cambridge Analytica scandal and the new European privacy law - known as General Data Protection Regulation (GDPR) - is not yet clear", Fox News' Chris Ciaccia reported. I saw them sprawled out across airports recently when I traveled, and it was definitely weird to see them.in-person, letting me know they're protecting my data more, on my phone. all while I know they don't.

"This is a privacy wake-up call that the markets are delivering to Mark Zuckerberg", said Jeffrey Chester of the Center for Digital Democracy, a privacy advocate, according to The Washington Post. However, average revenue per user in the region rose despite the lack of growth. The company is also rapidly expanding its real estate around the world to accommodate a hiring spree, which includes thousands of new workers to help combat foreign election manipulation on the site.

As ever with the stock market, share prices reflect the balance of supply and demand for the individual shares in question.

Assuming 484 million shares outstanding, as indicated in Amazon's second-quarter financial statements, this would put the company's market capitalization at $1.06 trillion.

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