Facebook shares plunge

Facebook shares lost almost a quarter of their value within just a few hours on Wednesday night. The drop came after the company announced that its revenue growth rate was down by roughly eight percent in the second quarter of 2018 compared to the first quarter. The company had also seen a slight drop in its user figures in Europe. Should Facebook founder Mark Zuckerberg be worried?

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Dagens Nyheter (SE) /

Just a market correction

Many see Mark Zuckerberg struggling after the data scandal. But for Dagens Nyheter his days as Facebook boss are far from over:

“Despite all the scandals, Facebook's stock price rose for a long time, and Thursday's crash can be seen as a market correction bringing it back to the level of recent years. Major shareholders like Trillium Asset Management may have demanded Zuckerberg's resignation, but it will be a while before we see Zuckerberg giving up his life's work. We should never underestimate how quickly circumstances can change in the US technology sector. Right now there is nothing to indicate that Facebook is on the verge of losing its huge clout in the digital advertising market and by extension its huge revenues. The only thing we have learned this week is that its power is growing a little less rapidly than before.”

Der Tagesspiegel (DE) /

No reason to panic

The drop in stock prices is more the result of exaggerated expectations on the part of investors than a problem with the company, Der Tagesspiegel believes:

“The fact is that 279 million people continue to log in to Facebook every day. That's just three million fewer than in the previous quarter. The data scandal no doubt played a role in the drop, but the falling figures reflect above all a fatigue with Facebook that we've been seeing for some time now. ... Even if Facebook is out of fashion among younger users this is not really a big problem for the company. It reaches these customers via Instagram, which also belongs to Zuckerberg's empire. ... So the company as a whole is not likely to run into financial difficulties. On the contrary: revenues increased by 42 percent in the last quarter, a figure most businessmen can only dream of.”

De Standaard (BE) /

Even high-flyers reach their limits

De Standaard, on the other hand, concludes that the drop in Facebook's stock price should serve as a warning:

“Even high-flyers like Facebook, Google, Apple, Netflix and Amazon reach their limits at some point. ... If one of the biggest names of the digital economy is now gasping for air, we must ask how much air is left in the technology sector as a whole. How realistic are all the high expectations? In the next few days and weeks we'll see whether another bubble bursts after the Internet crash at the start of this century. A large part of the price gains of recent years have been concentrated on a handful of leading companies. If confidence in them is shaken this can rock the financial markets.”

Tages-Anzeiger (CH) /

Facebook is consuming itself

The company could fall victim to its own strategy, the Tages-Anzeiger notes:

“For years it bought out competitors like Instagram or Whatsapp. ... With this strategy it neutralised one major threat: the threat from the outside. But now another has appeared: the threat from the inside. The danger of cannibalisation emerged - as can now be seen with Instagram. Whether things will work out in the end remains an open question. That depends on whether as much capital can be secured from users with the glossy format as with the classic Facebook platform. The basic problem: the formats from which new services like Instagram live aren't as profitable as posts on the static Facebook timeline. This is the problem the company must now solve.”