Facebook collapses 24% after earnings report
InvestingOnline.com
25/07/2018, 23:14Investors are selling Facebook following the earnings reports and weak guidance that includes a projected slowdown. Facebook is currently trading at 171.11, almost $46 below the closing bell.
“Our community and business continue to grow quickly,” said Mark Zuckerberg, Facebook founder and CEO. “We are committed to investing to keep people safe and secure, and to keep building meaningful new ways to help people connect.”
Facebook reported a Q2 EPS of $1.74, $0.03 more than expected. Company’s revenues increased 42.0% in the last year to $13.23 billion in the second quarter. However, it was a miss of $120 million.
Facebook said it sees growth rate falling by high single digits for the next couple of quarters. In the same line, Total expenses growth will exceed revenue growth in 2019.
The social media giant accounted 1.47 billion global daily active users in the second quarter, lower than the 1.49 billion expected by the market. However, average revenue per user was $5.97 in the Q2, more than the $5.95 expected by market.
2.5 million people were using Facebook apps each month. Those numbers include Instagram and WhatsApp.
Regarding recent scandals, Zuckerberg affirmed that the company is “also making progress in the fight against misinformation. We’re getting rid of the financial incentives for spammers to create fake news — much of which is economically motivated. And we stop pages that repeatedly spread false information from buying ads. We also use AI to prevent fake accounts that generate a lot of the problematic content from ever being created in the first place.”
Facebook technical analysis
Facebook daily chart July 25
Shares of Facebook closed Wednesday with 1.32% gains at 217.50 after posting its third positive day in the last four; however, the unit collapsed around 20% after hours following Facebook earnings report.
The share broke 20, 50 and 200 days moving averages throughout the collapse. In terms of days, if Facebook opens at currently levels tomorrow, it would be at 3-month lows.
Levels to watch are 170.00, 165.00 and 164.00 for the downside. Resistances are at 172.00, 176.00, and 181.00, 200-day moving average.
