Facebook, the world’s premiere destination for Minions memes, had AUD $162.6 billion wiped off its valuation overnight in the single biggest one-day loss in American stock market history.
The social media monolith sustained a 19% drop in its share price after chief financial officer David Wehner told shareholders the company had missed second-quarter revenue estimates, and expected things to be dicey for the months to come.
The reason: Facebook’s ongoing efforts to mitigate the impact of fake news and potential election meddling will cost more than expected. Way more. It is now expected those efforts will help to drive Facebook’s operating expenses up as much as 60% in the coming year.
In addition to the ongoing costs of making sure the damn near ubiquitous site is no longer a playground for political operatives and conspiracy theorists, the site’s end-on-end user growth in the US and Europe, two of its major markets, has stalled.
So, higher operating costs + a flagging userbase in major regions = a bit of a clusterfuck for investors.
That said, the site is still expected to reign in ungodly amounts of revenue, and maintains a valuation of AUD $691 billion. Plus, experts have speculated Facebook coup recoup its losses in its traditional business by hawking ads in growth areas like Instagram Stories, Messenger, and WhatsApp.
What does this mean for you? Likely not a huge amount, unless you just so happen to have thousands of shares in Facebook. Prepare for new and exciting ways to be shown ads, though.
