Facebook Shares Rise Despite Exposing Its Documents

Facebook shares are jumping after investors focus on its strong results and overlook the publication of document scandals

Facebook investors shrugged off the plethora of documents disclosed Monday and focused on third-quarter earnings that beat analysts’ expectations, as well as the company’s announcement of adding $50 billion to its stock buyback program, sending Facebook’s stock up 2% in extended trading.

During the third quarter, Facebook earned about $3.22 per share, compared to analyst expectations of $3.19, while it collected $29.01 billion in revenue to fail to reach the level of analyst estimates of $29.57 billion, with an average revenue per user of $10, compared to expectations of $10.15.

As for the number of daily active users, Facebook’s results were in line with analyst expectations of reaching 1.93 billion daily users, but the number of monthly active users was 2.91 billion users, compared to expectations of 2.93 billion.

CEO Mark Zuckerberg kicked off the quarterly results conference by defending his company after reports emerged of documents leaked by former whistleblower Frances Hogan, as leaked documents show that the number of teen users of the Facebook app in the United States has fallen by 13% since 2019 and expects their number to drop by 45% over the next two years.

It is also expected that the number of users between the ages of 20-30 years will decline by 4% during the same time period, and reports indicate that Facebook is aware of the many damages caused by its applications and services, especially on teenage girls, but the company avoids identifying and addressing problems.

Facebook told investors it was preparing a company that could look very different from its current ad-based business model. Read more [Facebook Is Planning For A New Name For Its Brand].

Facebook expects revenue during the fourth quarter to reach about $31.5-34 billion, but analysts estimate it is $34.8 billion, and this difference is due to the privacy changes that Apple introduced earlier this year, as it added some options that allow users to avoid targeting them with ads within applications, the same thing sent Snap Inc shares down 27% in its earnings report last week after it blamed changes to iOS for disrupting its business. Read more [Snap Stock Tumbles After Disappointing Results].

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