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Originally Posted by Buehler445
So what's driving the facebook/twitter dives?
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Facebook had an awful conference call w/ significantly diminished future guidance revisions. They guided revenues to fall off in the high single digits.
Operating margin fell from 50% in the first quarter to 44% and they guided it to continue falling and settle in somewhere in the mid-30's. This is due to hiring lots of people to help fight fake news and deal with GDPR in the EU, etc. that they pointed out obviously don't do anything to directly bring in additional revenues.
In Q1 they had an operating margin of 50% and profit margin of 40%. If operating margin is settling into the mid-30's then profit margin is likely headed to 25%ish. So they're gonna make less profits on 7-8% less revenue.
Also, Sheryl Sandberg said they aren't sure GDPR is completely baked into the current quarter or not so it could get worse.
I don't follow twitter so no idea