Facebook shares ended the regular US Wednesday trading session in the green. However, they tanked up to 10% as the tech giant released its second quarter earnings after the closing bell.
Data leaks and fake news took a toll on the social media platform and its revenues and daily user growth both failed to hit analyst expectations.
Facebook shares ended the US Wednesday trading session 1.32% higher at $217.50. However, once Mark Zuckerberg’s business published its Q2 earnings, the stock slumped sharply, trading as low as around 10%, before recovering a little to be some 7% in the red.
Facebook revenues, user numbers miss
Facebook’s Q2 earnings report showed the social media platform’s revenues came in at $13.23 billion. While that’s above the $9.32 billion from a year earlier, it was below expectations.
Similarly, Zuckerberg’s company achieved a daily active user number of 1.47 billion. Even though that represents an 11% gain on year ago levels, it was below forecasts.
“Our community and business continue to grow quickly,” said Facebook’s founder and CEO, Zuckerberg.
“We are committed to investing to keep people safe and secure, and to keep building meaningful new ways to help people connect,” he added.
Cost of scandal mount
Other earnings details showed that its advertising revenues climbed sharply from a year ago to a little over $13 billion – accounting for the bulk of its total revenues. However, total costs also climbed to $7.39 billion in Q2 2018, up from $4.4 billion a year earlier.
That underscores that the company has dug deep to fund its plans to improve the platform and remove as much political propaganda and fake news and accounts as possible. That’s something that was always going to require investment.
Indeed, the tech giant shared an update earlier this week of its fight against ‘bad actors’, particularly with regards to politics and elections. Facebook is now using artificial intelligence (among other tools) to monitor and police the politically related information that is shared across the platform.