Facebook shares fell 8% on Friday after the social network reported quarterly results, and investors were left scratching their heads as to how they managed to miss expectations.
Facebook’s shares plunged $2.18, or 6.5%, to close at $52.24 after the company reported fourth-quarter earnings that fell short of Wall Street’s expectations.
Facebook had expected to report earnings of $1.06 per share.
Facebook’s stock dropped 8.5% over the last 12 months.
Investors are wondering how the social networking giant managed to fail to reach the $1 trillion mark, even after its revenue grew by more than $200 billion in the past year.
Facebook is still a growing company and has already seen its stock rise in value nearly three times over the past 12 months as its valuation has climbed from $2 billion in 2018 to more than a billion in 2020.
But it is clear that the company’s problems are not confined to Facebook, and that is something to worry about as the tech giant continues to grow.
Facebook shares fell on Friday as investors awaited Facebook’s earnings release.
The company announced on Wednesday that it will report results on Thursday.
Wall Street had expected a Q4 earnings report that would be followed by earnings that would beat Wall Street expectations.
Analysts were expecting a better than expected Q4 results, as Facebook said it is focused on improving its core products and services.
Investors were expecting the company to report a loss, but the company is expected to beat Wall St. forecasts, and could still hit its target of $2 trillion in revenue.
Shares fell after Facebook said revenue growth slowed in the third quarter, as the company adjusted to the effects of the hurricanes Harvey and Irma.
The company also said it will add employees to help it respond to the new hurricane season.
Facebook stock was down about 6% in after-hours trading.
Shares of LinkedIn, the social media company, dropped 6% to $36.12.