Facebook stock whipsaws amid ad targeting concerns
27 January 2021
Facebook's stock showed volatility in after-hours trading Wednesday, despite adding users and beating on top and bottom lines.
Why it matters: Investors seem spooked by proposed changes to user data collection by Apple that would impact Facebook's ad business, in addition to perennial threats of new federal privacy regulations.
Details: In a statement, Facebook addressed the Apple changes and said ad targeting headwinds in 2021 include "the impact of platform changes, notably iOS 14, as well as the evolving regulatory landscape."
- The company says it expects to see an impact from the changes "beginning late in the first quarter."
- While Facebook beat Wall Street estimates on overall user growth, it reported for the second straight quarter daily active user declines in North America, its most lucrative ad market. But the company lost 1 million daily active users in the U.S. and Canada last quarter, it gained 3 million monthly active users in that same period.
By the numbers, per CNBC:
- Earnings: $3.88 per share vs $3.22 per share forecast by Refinitiv
- Revenue: $28.07 billion vs $26.44 billion forecast by Refinitiv
- Daily active users (DAUs): 1.84 billion vs 1.83 billion forecast by FactSet
- Monthly active users (MAUs): 2.8 billion vs 2.76 billion forecast by FactSet
The big picture: Facebook's business was resilient in the fourth quarter despite pandemic-related headwinds to the advertising sector broadly.
- In a statement, the company attributed its growth to two broad economic trends playing out during the pandemic: the ongoing shift toward online commerce and the shift in consumer demand to products and away from services.
What's next: Facebook forecasts that in the first quarter of 2021, it will be "lapping a period of growth that was negatively impacted by reduced advertising demand during the early stages of the pandemic."
Go deeper:
Transcripts show George Floyd told police "I can't breathe" over 20 times
Section2Newly released transcripts of bodycam footage from the Minneapolis Police Department show that George Floyd told officers he could not breathe more than 20 times in the moments leading up to his death.
Why it matters: Floyd's killing sparked a national wave of Black Lives Matter protests and an ongoing reckoning over systemic racism in the United States. The transcripts "offer one the most thorough and dramatic accounts" before Floyd's death, The New York Times writes.
The state of play: The transcripts were released as former officer Thomas Lane seeks to have the charges that he aided in Floyd's death thrown out in court, per the Times. He is one of four officers who have been charged.
- The filings also include a 60-page transcript of an interview with Lane. He said he "felt maybe that something was going on" when asked if he believed that Floyd was having a medical emergency at the time.
What the transcripts say:
- Floyd told the officers he was claustrophobic as they tried to get him into the squad car.
- The transcripts also show Floyd saying, "Momma, I love you. Tell my kids I love them. I'm dead."
- Former officer Derek Chauvin, who had his knee on Floyd's neck for over eight minutes, told Floyd, "Then stop talking, stop yelling, it takes a heck of a lot of oxygen to talk."
Read the transcripts via DocumentCloud.