Ever since Facebook reported the financial results of the second-quarter highlighting some really scary trends, the fb stock price has sunk more than 13%. The recent Facebook stock news suggests that the company is already in talks with Wells Fargo , JPMorgan Chase, US Bancorp, and the Citigroup to check out if these banking giants would like to partner with them. Facebook is quite hopeful that the banks will agree on sharing financial information related to their customers on just about everything from checking-account balances to card transactions. This push seems to have arrived amidst the successful jump of Apple into the financial services as it offers Apple Pay whereas PayPal, Square, and others expanding in mobile payment age.
In the meantime , Facebook and different other social media platforms, including Twitter and Snap, are going to feel the heat from growing chorus of citizens and governments concerned about fake news, cellphone addiction, and other similar issues.
Recently, the French government took it too far as they voted to put a ban officially on using cellphones in schools. The country’s lawmakers came to a decision that any student below 15 years of age must not carry their cellphones into the school’s premises, or have their cellphones turned off at least when they’re in school. Country’s education minister, Jean-Michel Blanquer, was of the view that this ban was aimed at removing any distractions and encouraging children to read and play outside the classroom. In addition, he was hopeful that the new law can deliver a symbolic message to the entire country for curbing their smartphone usage.
As far as investors are concerned, they must note that earlier in the month Instagram and Facebook came up with quite a few initiatives that would allow the users to feel like they’ve got better control over the amount of time they can spend on these platforms. It’d now be possible for everyone to set reminders so that they can stop using Instagram or Facebook after spending a particular time on the platform. They can also block notifications temporarily as well and their total time spent on the social media platforms can also be logged down.
Zuckerberg has begun making an outward ‘time well-spent’ push because Facebook can’t just afford to see people going away and that’s why they’ve started fighting the fake news issues among different other challenges. The company wants that the users have a feeling that these social media platforms offer ultimate value to them so that it continues to enjoy its outsized success and the Facebook stock also sees a hike in price like Amazon stock price, Apple stock price and Twitter stock price. So, it really is a great time to invest as the company has already started taking steps to reclaim its success in the stock market.
If you look at the Facebook stock chart, you’d notice that even though the company ended up in loss, it saw the quarterly revenues climbing by almost 42% as they hit the $13.23 billion mark. Despite the growth of revenues, the slowing down of user growth numbers caused the historic selloff for FB. In Europe, the DAU totals of Facebook fell from 282 million in the first quarter to 279 million. In this very region, Facebook also saw sequential decline of MAUs as well.
At the end of second quarter, Facebook closed with a figure of 185 million DAUs both in the US and Canada, marking almost 1% growth without any sequential expansion. The 241 million figure for MAUs also made it flat from the first quarter increasing about 2% only from year-ago quarter. The company saw growth both in the Asia-Pacific and ‘Rest of The World’ regions. However, in Europe, Canada and the US, it generated almost 72% of its total revenues for the second quarter only accounting for 28% of the total Active Monthly User base.
Only 1.5% growth in Facebook ’s DAUs is probably the slowest to have had happened to date. If the user growth of the company keeps slowing down, the advertising revenues of Facebook will follow as there are just so many adverts that can be posted by Facebook while ensuring that the user experience is not damaged.
To cut the long story short, David Whener, the CFO at Facebook , said on a conference call at the company that the operating margin might fall to ‘mid-30s on percentage basis’ over more than 2 years. The reported operating margin of the company for second-quarter was 44%, which is already at the lowest point in last 5 quarters.
Moving forward, however, the projection of the company’s revenues is to climb by almost 34% to hit $13.83 billion which will definitely bring the better for facebook stock tomorrow on NASDAQ. In the mean time, the expected adjusted earnings for the 3rd quarter would sink almost 7%.
In addition, the estimated earnings revisions for the company have seen a downward trend for the 3rd Quarter and for fiscal year 2018 as well as 2019. Now, what that means is the investors might want to keep themselves away from the Facebook stock right now for some time. Nevertheless, resources like Calculator All can still help with doing calculations and getting more insights into the stock market and how Facebook stock is going to move going down the road.
ValueSpectrum.com News Wire & Equity Research: +31 084-0032-842
Copyright analist.nl B.V.
All rights reserved. Any redistribution, duplication or archiving prohibited. analist.nl doesn't warrant the accuracy of any News Content provided and shall not be liable for any errors, inaccuracies or for any actions taken in reliance thereon.