Shares in Facebook fell as much as eight per cent as Wall Street opened this afternoon, following a disappointing set of a results from the tech giant last night.
More than $50bn was wiped off Facebook’s market capitalisation as a result of the slump, though shares have since recovered to be down 6.8 per cent.
The social media firm reported its fourth consecutive quarter of revenue growth under 30 per cent last night, and its slowest quarter of growth since going public in 2012.
It also posted a 51 per cent rise in total costs and expenses compared to 2018, after Facebook had to increase spending on improving privacy and security on the platform. Following the results release, the firm added it had agreed a $550m settlement in principle related to a 2015 lawsuit that claimed it illegally collected and stored biometric data for millions of users without their consent.
“Facebook remains in investment mode — as are all other internet platform companies — reflecting significant growth opportunities and infrastructure needs,” said Baird senior research analyst Colin Sebastian in a note to investors.
He added that shareholder expectations for the upcoming year “should now be better calibrated to moderating growth rates, addressing one of our concerns, with potential catalysts from new products”.
In an analyst call late last night, Facebook chief Mark Zuckerberg said the company would be undergoing a shift change in the years ahead.
“One critique of our approach for much of the last decade was that because we wanted to be liked, we didn’t always communicate our view as clearly because we worried about offending people. This led to positive but shallow sentiment towards us and the company,” he said.
“My goal for this next decade isn’t to be liked, but to be understood. In order to be trusted, people need to know what you stand for.”