Facebook Stock Tumbles 24 Percent As User and Sales Growth Slows After Scandals

For months, Facebook has weathered a series of scandals — including Russian misuse of the platform to interfere in the 2016 American presidential campaign and the harvesting of its users’ data through the political consulting firm Cambridge Analytica — with hardly any effect to its business. Facebook has continued to post healthy double-digit increases in revenue and profit every quarter. But on July 25 it showed some of the first signs of wear and tear from the months of scrutiny.

The Silicon Valley company reported a 42 percent increase in revenue and a 31 percent jump in profits for its second quarter, compared with a year earlier. But the results, which would be robust for most companies, were accompanied by decelerating growth in sales and Facebook’s slowest growth since 2011 in the number of its users. On a conference call to discuss earnings, CEO Mark Zuckerberg said profits would most likely take a further hit because the company planned to spend more on security. And the chief financial officer, David Wehner, said revenue growth would substantially decline for the rest of the year, partly because the company planned to give users more options with their privacy settings, which would let them limit the kinds of ads they saw. The results and commentary sent Facebook’s stock tumbling more than 23 percent in after-hours trading, erasing more than $120 billion in market value in less than two hours.