So yesterday, Facebook made IT support history. But it’s probably the worst kind of history a company can make. Facebook sets a record (this one ain’t good).
Yesterday, Facebook lost around $150 billion in 90 minutes! Facebook leaders told stockholders and the public they expect a slowdown. They also expect this slowdown to last for years. These are things no Facebook stockholder wants to hear. Then the selloff began, and kept up for the last 90 minutes of the trading day. By the time the nightmare of a day ended, Facebook stocks were down 24%. Now, $148 billion in Facebook value is gone. As of this writing, it still struggles in the red.
Yesterday, CEO Mark Zuckerberg said 2.5 billion people are on Facebook now. But that’s where the good news ends. Because he followed with woeful second quarter numbers. Then add the lack of new daily and monthly active users. But that’s not what started the downward spiral. First, Facebook CFO David Wehner said revenue growth will slow. Then he said expenses will surpass growth and revenue into 2019. Ouch. That’s not good. Right now, operating margins are in the early forties. But for now, and in the years to come, they expect profit margins to be in the middle thirties. I’m not sure if Facebook sets a record. But it’s coming awfully close.
Facebook is an IT service company that knows better days. They can start with the fake news controversy in the wake of the tumultuous 2016 US election. To this day, many on the political left partially blame Facebook for Trump’s win because of ‘fake news’ articles and alleged Russian hacking. Then came the Cambridge Analytical scandal. Finally, I read an article saying that less teenagers, the iGeneration/Generation Z, are even into Facebook. Partially because it’s now so popular with older generations. So now, they’re turning to other forms of social media. Will Facebook recover?