A new crisis began with Facebook and Netflix, everyone else on the queue

© RIA Novosti / Vladimir Astapkovich Zuckerberg. Archival photo.A new crisis began with Facebook and Netflix, everyone else on the queue© RIA Novosti / Vladimir Astapkovich

After the publication of the quarterly report, shares of Facebook fell by 20 percent. The capitalization of the company fell to $ 130 billion, and Mark Zuckerberg for a day has decreased by almost 17 billion. Now it risks to depart from the five richest people in the world. Why sentiment has changed so dramatically and whether this means the beginning of a new stock market crisis — in the material RIA Novosti.

Expectations and reality

The expectations of the stakeholders of Facebook are not met for the first time in 2015. Revenue was 13.2 billion — was at least 200 million less than what analysts predicted. Disappointed and indicators expand the audience of the social network in the U.S. and Canada, the number of users has not changed (241 million people), and in Europe, and is decreased (from 377 million to 376 million).

But more than anything quotes have influenced the statement of the Finance Director of Facebook David Werner that in the near future revenue will be reduced by almost a third from 47 percent to 30 percent. Among the causes he mentioned the decline in the dollar revenue coming from the Old world related to the strengthening of the dollar against other currencies, lowest performance of the functions of Stories, not caused interest among advertisers, and new laws on the privacy of the users taken in Europe.

Assessing the integrity of Werner in value, investors staged a mass sale of shares.

Echoes of war

The trouble with Facebook started when the media leaked information that in 2016 during the election campaign, the firm Cambridge Analytica, collaborated with the presidential candidate Donald trump, illegally received access to the data 87 million users of the social network. Mainly US citizens.

Modern technologies for analysis of big data to transform such data into an effective tool for targeted advertising. In the case of Facebook it was even worse — the data collected via the app, which was proposed to undergo a psychological test for a cash reward.

In the end, Cambridge Analytica got psychological profiles, and experts on election technologies were able to distribute targeted political advertising are inclined to vote for the right candidate.

It is worth noting that this technology was used in the previous election staff of Barack Obama. But then the source of information to identify and failed.

You have been warned

In late June, economists scored the alarm: the world stands on the brink of another global crisis and the collapse of the markets. This was stated by two of the most famous managers of hedge funds in Europe, Greg Coffey and Russell Clark, and Nobel laureate in Economics Paul Krugman.

Coffey noted that the current investment situation repeats 2000. Clark also warned against investment in Internet companies, which previously gave good profits, but now due to overheating are a bubble that will burst.

It seems that alarming prediction comes true. And it’s not only about Facebook. On the sixteenth of July the world’s largest online kinoservis and manufacturer of TV shows Netflix has released a report on the income, also led investors to sell shares.

Problems at Netflix the same as that of Facebook: the audience in the American market increased by 670 thousand people instead of the expected 1.2 million, and the cost of content production to the end of the year will exceed revenues by three to four billion dollars. Total per day cost of Netflix stock fell by 15 percent and capitalization of the company at $ 24 billion.

Other American IT giants also went down, although not as rapidly. Twitter for one trading session fell by 6.5%, Amazon 2.5%, Apple — by 1.6 percent.

It’s all very reminiscent of the dot-com crisis (i.e., Internet companies), which erupted in 2000, when a reasonable investment gave way to impulsive contributions to the growing IT companies and startups. Almost any IT-the idea, even stated on one page, without a clear business plan could involve millions of dollars. Investors are afraid to miss out on new Apple, Amazon or Microsoft than to lose money.

After March 10, 2000 the Nasdaq Composite index has updated a maximum in 5046,86 points, the most far-sighted investors began to take profits by selling overvalued stocks losing IT-startups. The market collapsed, and by October 9, 2002 the Nasdaq Composite was at a historic low in 1114,11 points.

If the IT-bubble burst now, it will hit the us economy is stronger than 18 years ago. In the conditions unleashed by the trump trade wars is a high-tech company is holding the market from falling: the growth index this year, 80 percent are collateralized by securities FAANG (Facebook, Apple, Amazon, Netflix, Google).