Published On: Thu, Jul 26th, 2018

Facebook decides to place Privacy first and the stock prices plunges by 20%

Facebook made news about placing Privacy First and about rethinking its Product Experience on Thursday. This news caused the Facebook stocks to plunge by 20 percent.

Facebook decides to place Privacy first and the stock prices plunges by 20%

Other than this Wall Street sharp reaction to this news, a report also showed reduced growth in number of users as well as crease from revenue ads. The estimated revenue from ads was totaled at 13.2 billion dollars for the first quarter which is lower than the Wall Street’s actual estimates. Although the stock prices regained some stability as the evening wore down but the investors clearly seem spooked.

On Wednesday, investors experienced the lingering damages that came for Facebook after the months of bad press and regulation scrutiny.

The CFO of Facebook, David Wehner told analysts in a conference that as the Facebook offers the new formats like Stories and More User Privacy options, the growth of sales will see a decline.

Wehner stressed the fact that while introducing the Privacy option and stressing this factor primarily there will surely be a negative impact on revenue growth. The Sweeping of New Data Protection in European region will also have impacts on revenue growth.

With this spooking news of decrease in sales growth, there is other troubling news that Facebook’s expenses will increase as well. Wehner said that the company is going to pour in Billions of Dollars in introducing these new Privacy features that involve the Facebook’s involvement with meddling of elections. He concluded by saying that we think it’s the right thing for the business at the moment.

This conference is also similar to the action of the CEO of Facebook, Mark Zuckerberg’s last year investment in prohibiting abuse on Facebook that cuts the profitability.

During this quarter, Facebook nearly added 22 million new users n daily basis. This is nearly the half of the 41 million daily new user of the last year’s quarter.

 

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