The following is an excerpt from Seth Fiegerman | July 25, 2018 | CNN.com |
Facebook's stock plunged as much as 24% in after hours trading on Wednesday after the company said it expects revenue growth to slow as it "puts privacy first" and rethinks its product experiences.
Wall Street's sharp reaction followed an earnings report that showed slower than expected growth in user numbers and ad revenues. Revenue hit $13.2 billion for the quarter, up 42% from the same period a year prior, but below Wall Street estimates. The stock later pulled slightly off its low point.
It's a rare moment of weakness for Facebook (FB) at a time when investors are scrutinizing the company carefully to determine whether there is any lingering damage from months of bad press, user outrage and regulatory scrutiny.
During a conference call with analysts, Facebook CFO David Wehner said sales growth may decline as the company prioritizes new formats like Stories and offers users "more choice around privacy."
He said the company will invest "billions of dollars per year" improving safety and security after a bruising period of headlines about fake news and election meddling. "We think that's the right thing to do for the business," he said.
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