— This is the script of CNBC's news report for China's CCTV on July 26, 2018, Thursday.
Facebook's latest earnings report stroke the market when the tech sector of US stock market was increasing overnight. Let's have a look over several important pieces of data. First, in the 2nd quarter, revenue and customer growth of Facebook are not as good as the expectation from the Wall Street's analysts. In terms of revenue, Facebook's global revenue is USD 13.32 billion; which is lower than the market previous forecast of USD13.34 billion. This is also the case of Facebook, which has seen its first quarterly operating income less than expected since 2015.
Meanwhile, customer growth is also not as good as expectation, according to the data from Factset, Facebook has 1.47billion global active user, and this number is below the forecast of 1.49billion. Not only in North America market, but also in Europe market, Facebook's daily active users are fewer than expectations.
Daily active user in Europe area shows a negative growth firstly in 2 years, the reason behind that is GDPR – General Data Protection Regulation that was implemented in Europe since the 2nd quarter. The latest financial report shows that the implementation of this privacy regulation has a greater impact on Facebook users in the European market than previously expected. At the same time, the stagnant growth of North American users has put further pressure on the company's prospects.
On the phone meeting after the earnings released, Zuckerberg, CEO of Facebook said that their whole revenue growth will narrow further in this year, and the third and fourth quarter growth will show a great single digit decline. This statement causing a crazy selling in Facebook's share, and its share price declined more than 20%.
[Josh Blechman] "It's important to know that even after today's, or this post market 20% decline, its still above the lows seen during that cambrdige analytica struggle, so it would not surprise us at all to see the strock retriet furthur from here, at least to the levels that were hit after that news broke."
This 20% drop means Facebook's market value shaded USD 126 billion compared to the closing session, and the Zuckerberg lost USD16.8 billion in net asset. We will keep an eye on the market reaction.