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Facebook Businesses Social Networks The Almighty Buck

Facebook Stock Plummets 6 Percent After It Reported Fourth-Quarter Earnings, Wiping Out $30 Billion In Market Value (cnbc.com) 64

Posted by BeauHD from the going-going-gone dept.
JustAnotherOldGuy writes: Facebook issued a disappointing quarterly report, sending its stock price down by 6%, reports CNBC. In the report, Facebook reported a 51% rise in expenses and "warned of advertising headwinds related to privacy and regulatory changes on the horizon, leading to slowing growth in the U.S. Facebook said privacy improvements on Apple's iPhones and Google's Android software could hurt its ability to target advertising." Here are the key numbers from Facebook's fourth-quarter earnings report, per CNBC:

Earnings (EPS): $2.56 vs. $2.53 per share forecast by Refinitiv.
Revenue: $21.08 billion vs. $20.89 billion forecast by Refinitiv.
Daily active users (DAUs): 1.66 billion vs. 1.65 billion forecast by FactSet.
Monthly active users (DAUs): 2.5 billion vs. 2.5 billion forecast by FactSet.
Average revenue per user (ARPU): $8.52 vs. $8.38 forecast by FactSet.
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Facebook Stock Plummets 6 Percent After It Reported Fourth-Quarter Earnings, Wiping Out $30 Billion In Market Value More

Facebook Stock Plummets 6 Percent After It Reported Fourth-Quarter Earnings, Wiping Out $30 Billion In Market Value

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  • Wow (Score:5, Insightful)

    by Anonymous Coward on Thursday January 30, 2020 @08:30PM (#59673140)
    So if 6% market value is $30B US then the market value for Facebook whole is $500B US? SMH. What "Value" is there???

    • Facebook is a leader in developing and delivering targeted advertising down to the user level. The thing is, so many small-time ads float through them that they can't regulate it well, and keep getting fined for violations of privacy and ad standards.

      Basically, Facebook will deflate as they're told they can't do what the advertisers wanted.

      • Re: (Score:3)

        by hey! ( 33014 )

        That's one way of looking at it. Logically equivalent: Facebook peddles its users to its advertisers.

      • Re: (Score:2)

        by g01d4 ( 888748 )

        Facebook is a leader in developing and delivering targeted advertising down to the user level.

        Even so, it's hard to believe they're generating that much revenue from and for advertisers to warrant such a high PE ratio.

        • At a PE ratio of north of 32, I can't imagine myself holding Facebook stock for 32 years to break even as an owner, and I can't see where growth would come from to drop that number.

          Not for me. Maybe for the charting whiz kids, but I've never set foot in a casino in my life, and I don't gamble. I'll stick to my boring old index fund and businesses I know well.

          Much more of a tortoise than a hare, despite my external appearance of going a million miles an hour.

      • It's gonna deflate as soon as people realize that the ads don't work and it's mostly snake oil. It's a bit like religion, as long as you believe in it, it has value. As soon as you notice that it's mostly bullshit, it's gone and you have a lot of spare time and money on your hands.

        • It's gonna deflate as soon as people realize that the ads don't work and it's mostly snake oil.

          While I don't think you're wrong in the big picture, is there any, actual, you know, EVIDENCE that the ads don't work? Or is that just wishful thinking on some people's part?

          • Re: (Score:2)

            by hjf ( 703092 )

            Ads worked a few years ago. We had our business page on Facebook and paid $1 or $2 in ads, and that would drive hundreds of views and dozens of reactions to our posts. Then Instagram happened, and even putting $10 in facebook ads doesn't drive more than TWO likes.

            Depending on your demographic, it boils down to:
            Boomers:
            Facebook: toxic politic argument playground
            Instagram: why can't i zoom? Why did i heart this? I wanted to zoom!
            TikTok: what?

            Millennials:
            Facebook is dead, but I browse idly for it. Marketplac

            • Re: (Score:3, Insightful)

              by jrjarrett ( 949308 )
              Huh. Once again, we GenX'ers are just left out of the picture. *goes and opens door to empty house with latchkey*

          • Do they work on you?

      • "Facebook is a leader in developing and delivering automated hyper-invasive mass surveillance for gestapo agencies worldwide"

        FTFY

    • Re: (Score:2)

      by bondsbw ( 888959 )

      What "Value" is there???

      False value.

      Individual stock value only theoretically ties to the overall value of the company. But a public company’s full stock would not be sold for the aggregate price of individual shares.

      Day trading bastardizes the value of the company. But companies put those folks (shareholders) in charge... which explains why many publicly-traded companies seem to care more about short term gains than long term success.

    • Re:Wow (Score:5, Informative)

      by phalse phace ( 454635 ) on Thursday January 30, 2020 @10:36PM (#59673450)

      So if 6% market value is $30B US then the market value for Facebook whole is $500B US? SMH. What "Value" is there???

      They have 2.5 billion monthly active users where each user brought in an average of $8.52 for Facebook. This allowed Facebook to generate sales of $70.697 billion and net income of $18.485 billion for all of 2019.

      The story was similar for fiscal year 2018: 2.32 billion monthly active users. ARPU of $7.37. Revenue of $55.838 billion. Net income of $22.112 billion.

      Same goes for fiscal year 2017: 2.13 billion monthly active users. ARPU of $6.18. Revenue of $40.653 billion. Net income of $15.934 billion.

      TL;DR? Facebook generates a lot of money. And they're an effective platform for advertisers. That's why about 85% of social media ad spending is done on Facebook, about 20% of digital ad spending is done on Facebook, and about 30% of mobile ad spending is on done Facebook.

    • Came here to say,"...and nothing of value was lost."

    • People are voting with their wallets, and their wallets are saying companies like Facebook and Google provide one of the most worthwhile things in life: spam. Imagine the emptiness of a day without seeing any ads.

  • Couldn't happen to a nicer bunch... (Score:5, Informative)

    by TigerPlish ( 174064 ) on Thursday January 30, 2020 @08:31PM (#59673150)

    Couldn't happen to a nicer bunch of assholes.

    I'm not wishing ill on the people who have facebook stock because of their investment portfoliio or whatnot, but it's time the exects themselves from Zuckerberg on down feel the pain of their own decisions.

    Fuck 'em. With a splintered phone pole. All night long. Dry.

    • Comment removed based on user account deletion
      • Facebook is one of the good guys on that regards, basically others simply banned political ads which is a cheap way out. Facebook basically goes more along the first amendment path which is good for all of us. On the privacy and other issues they are near the worst offenders category.

    • Re:Couldn't happen to a nicer bunch... (Score:5, Insightful)

      by geek ( 5680 ) on Thursday January 30, 2020 @08:50PM (#59673192)

      They will never feel any pain at all. They will sleep on enormous piles of cash until the day they die. Next week the stock will be back up where it was or higher. Karma is for poor people.

      • "Karma is for poor people."

        Perhaps. But Zuckerberg obviously doesn't believe that. Look know much he has already started to give away to "charity". Trying to buy indulgences. Wait 'til he's old and sick, he'll really crank up the "giving". Maybe even have some temples built. Try to buy his way out of Hades, after a life of perfidy.

      • ...until the day they die.

        Jurisdiction accepted!
    • really not much of a setback, governments are printing so much money it will reach a record price within in days, Zuckerberg is too big to fail

    • except for their crappy advertising model that allows political mud slinging in advertising Facebook is actually not that bad. They've scaled out well over the years.

      I think that it was that shoddy advertising model that, in part, sunk their overall market cap. People are realizing that with all the new privacy laws taking effect that kind of ad revenue model doesn't make much sense anymore.

    • When you're worth $80 billion, you can lose $480 million and not even cry.

    • I'm not wishing ill on the people who have facebook stock because of their investment portfoliio or whatnot, [...]

      I am. If you hand your money to them, you're part of the problem.

  • is like $30 billion In Zimbabwe dollars. With a company like facebook, that produces nothing of any value, 30 billion dollars is just, nothing... There was nothing there but speculation, a wager, poof!

    • With a company like facebook, that produces nothing of any value

      Advertisers must not have gotten that memo since 85% of social media ad spending, about 20% of digital ad spending, and about 30% of mobile ad spending are done on Facebook.

      • True, and the money will flow as long as it's the dumb money feeding the machine. Bob Hoffman's been writing about it for years on his excellent blog, e.g.:

        http://adcontrarian.blogspot.c... [blogspot.com]

      • Yes, it is a flow of currency that is valuable only to commodity speculators. The only physical product produced aside from the database is propaganda, most of which is detrimental to the general population.

    • You know, you come from nothing, you're going back to nothing.
      What have you lost? Nothing!

  • That's a good start.. (Score:3)

    by toonces33 ( 841696 ) on Thursday January 30, 2020 @08:47PM (#59673190)

    The whole thing is rotten to the core.

  • Comment removed based on user account deletion

  • A whole 6%? (Score:5, Insightful)

    by 110010001000 ( 697113 ) on Thursday January 30, 2020 @09:06PM (#59673222) Homepage Journal

    It is up 70% this year. Seriously, who cares? It will be back up by the end of next week. People like tech stocks.

  • Wow all the facebook bullshit could be avoided if people could just be convinced to spend $10 a year to be the actual customer

    • $8.52 is just the average each monthly active user brings in though.

      The cost is much less for people outside of the U.S. and Canada.

      Average revenue per user in the U.S. and Canada (combined) for the quarter was $41.41. Facebook grew that metric by almost $7 versus the year ago quarter.

  • How are AOL, webtv and myspace doing?

    • Or... (Score:5, Insightful)

      by JBMcB ( 73720 ) on Thursday January 30, 2020 @11:14PM (#59673528)

      Digg. Dogpile. Ask Jeeves. Real Networks. Pointcast.

      Altavista was *the* search engine in the early 2000s. Nobody even came close. It took Google about two years to eat their lunch, mainly because the search results were decent, and the front page loaded quickly. That's all it took. All the advertising nonsense and bloat that's creeping into Google's results? That's what tanked Altavista.

      Nobody talks about Yahoo anymore, right? Well, it's still one of the most visited websites in the world.

      Marketing types would like you to think otherwise, but the web is pretty much friction-less. You can drop Facebook tomorrow and it wouldn't be a big deal. You can swap out all of your search engines from Google to Bing, or DuckDuckGo, in a couple of minutes. Yeah, there's always the story of some company that only accepts job applications via Facebook, but those are the rare exceptions and far from the rule (I wonder how much Facebook pays for those "news stories.")

      • I miss banner ads and pop ups. Now we have overlays and tracking and cross-site advertising and massive data mining on a level that should be considered illegal strip mining.

  • and moving in with next door neighbour Jeff Bezos?

  • Average revenue per user (ARPU): $8.52 vs. $8.38 forecast by FactSet.

    Uh, anybody think they'd be able to offer a $3/mo. ($9 per quarter) per user ad-free package...

  • Much as I'd like FB to fail, a 6% drop is no big deal considering they're still up 30% from a year ago. Yes, stocks are volatile.
  • I encourage you Faecebook people to make sure next quarter the Faece-stock will drop even further. For the good of humanity, you know.

  • Frienster, MySpace, Orkut, Google+, and (gasp) Apache Wave.

  • I had to laugh when reading about DAUs. In German, a nuclear accident is called a GAU (Größter anzunehmender Unfall; maximum credible accident). From that we derived the DAU - Dümmster anzunehmender User; Dumbest credible user. How fitting for Facebook earnings...
  • Just think, 94 to go and we can work on the next one. Heads goofle, tails netf*ck.
  • Good. More please
  • Thirty billion isn't much when the currency is fake Internet money. Also for what its worth - Facebook is the most corrupt company on the planet right now and I hope they get broken up into pieces and destroyed. Some jail time for the execs would do the world some good.
  • Strike while the iron is hot! Take back the rightful throne!

  • Isn't plummet a strong term for 6%? (Score:3)

    by Somervillain ( 4719341 ) on Friday January 31, 2020 @12:10PM (#59675372)
    If you fell 6% of your height, it wouldn't be a plummet. If you fell 6% of a 1 story building, you wouldn't plummet. I don't even think 6% of a 5 story building would be a plummet yet.

    I hate facebook as much as most commenters here. My threshold for plummet is just much higher than 6%.

    This is newsworthy, but I am not concerned about Facebook's viability. They are profitable and will be for a very long time...the short attention spanned investors are unhappy and they can fuck themselves.

    I'm sick of Wall Street. My employer has been profitable for 20+ years and has seen profits grow every quarter, but if growth is off guidance by 1%, our stock price tanks 25%. The also got major wood when they introduced layoffs for the first time in 15 years recently...so now, we're laying off 1% every year just to make those assholes happy....not even bad employees...mostly newly created positions.

    I suspect it is a scam...create jobs that weren't needed and claim growth to please Wall Street...then lay them off to please Wall Street. I have no love for facebook, but there is no fate terrible enough for the investment firms on Wall Street. Few systems are as sociopathic as them. What's worse is that the CEO and leadership are compensated based on stock price, so everyone is in on the destructive behavior...causing serious long-term consequences for short-term gain. The company is not innovating as well as they could and they're certainly not offering as good of service as they could to customers. There's no margin for long-term vision.

    ...so that's my woes...but I am pretty confident that nearly everyone working in a publicly traded tech firm is experiencing the same or worse. How much better would the products from the major tech titans be if the folks making the decision were compensated by metrics other than the short-term whims of cocaine-addled Wall Street investors?
  • FB makes $8 a user? That's crazy! Highway robbery if you're an advertiser. Read Jaron Lanier's Ten Arguments to Delete Your Social Media Account Right Now to understand how fundamentally wrong and evil the "free" internet is. Then delete your social media accounts. I'm killing my FB account today. Then, if you have the time, read McNamee's 'Zucked to get a full accounting of FB's evil doings in gory details. This will really get your blood boiling. It is downright criminal that a company whose sole purpo

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