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Facebook, Over $100B in value disappeared

July 27, 2018
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Facebook, Over $100B in value disappeared

After the company’s quarterly earnings call with investors, FB’s stock price dropped ~20% in after-hours trading. Over $100B in value disappeared in an instant after FB announced disappointing revenue numbers and user growth.

Some context: that’s comparable to the entirety of General Motors, Ford and Target… combined.

Why did the stock tank? A perfect storm hit one of Facebook’s core features, the News Feed:

  • Less “viral” clickbait in the feed. Facebook has committed to optimizing for “time well-spent” in the app, not overall engagement. While this shift made for a better experience for users, FB can’t show users as many ads as before.
  • Less feed personalization. In the wake of the Cambridge Analytica scandal and recent GDPR regulations, Facebook revamped its data usage policies and privacy controls. These changes hurt FB’s ability to charge companies big bucks to specifically target ads.

But the most interesting change to the News Feed: the rollout of stories, a well-received but not-well-monetized feature that could change how most people use Facebook and their products altogether.

Stories might actually break Facebook

 

Source: Angelist

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