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In previous years, companies were not valued as highly as Facebook is so their losses were smaller.

Analysts said that a confluence of factors explained Wall Street's recoil: the lower-than-expected revenue guidance; slimmer margins; and the reverberations of the Cambridge Analytica scandal, in which the data consultancy affiliated with the Trump campaign inappropriately siphoned the private data of tens of millions of Facebook users.

Facebook Chief Financial Officer David Wehner said on a conference call with investors that Facebook is "putting privacy first" after the Cambridge Analytica scandal triggered a wave of awful press, customer angst and regulatory scrutiny around the world.

The stock drop, to its lowest levels in almost three months, wiped out almost $120 billion in market capitalization for Facebook and dragged down other internet and tech stocks including Twitter and Snap. Facebook's results prompted selling in other Nasdaq listings, including media and advertising rivals Amazon.com Inc, Netflix Inc and Alphabet Inc.

Facebook forecast similar increases for the second half of the year, also citing spending on video content and marketing.

USA technology companies are set for a bumpy ride on Thursday's stock market as contagion spreads through the sector after Facebook shares plunged 24% on Wednesday.

"Facebook generated $13.23 billion in second-quarter revenue - up 42 percent year-over-year - though it missed analysts' estimates at $13.36 billion", Ciaccia noted.

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Wehner said quarterly revenue growth would be closer to 30 per cent the rest of the year. It also is bracing for currency fluctuations as the dollar gets weaker.

Read the full story at Fox News.

European advertising revenue growth in Europe "decelerated more quickly than other regions", partially because of the new European privacy laws, Wehner said.

Facebook's daily active users for the second quarter of 2018 were effectively flat in the USA sequentially, and even declined in Europe compared with Q1 - marking the first time the company has seen such a decline in recent quarters.

"Facebook is actively choosing to make less money, deprioritizing near-term monetization to drive engagement to even higher levels to capture even more of their 2.5 billion monthly users' time and attention", he wrote. Commercialisation of those apps is nascent.

This was evident in a 50 per cent rise in costs year-on-year for the quarter.

According to Business Insider, a Facebook investor has drawn up a new proposal to oust Mark Zuckerberg as chairman, 10 months before the social networking giant's next shareholder meeting. Traders are bracing for a decline in tech stocks when the markets open Thursday.