Facebook Opens Down 20%, Halts Party for Tech ETFs
This article was originally published on ETFTrends.com.
Technology ETFs have been the beneficiaries of a NASDAQ that has been on an upswing in 2018, but today, the party came to a temporary halt today for those holding Facebook as the social media company disappointed with their earnings report on Wednesday.
Shares of Facebook fell to as low as $174.48 Thursday morning. The stock ended trading Wednesday at $217.50, but now is on pace to have its worst day as a public company after opening 19.6 percent down, missing its second quarter earnings estimates and disappointing investors with its daily active user count.
Related: Tom Lydon Talks Tech, EM, Facebook on Fox Business
The issue wasn't isolated as Facebook's plunge shaved off $120 billion from its market value, dragging down the rest of the sector with it-- the NASDAQ was down 656 points as of 11:00 a.m. ET.
While earnings per share were reported on Wednesday at $1.74 versus $1.72 consensus estimates, Facebook stumbled on revenue, reporting $13.23 billion versus an expected $13.36 billion. Meanwhile, global active daily users came in at 1.47 billion while estimates were 1.49 billion.
Following the announcement, shares of Facebook fell by over 20 percent.
“Management commentary about decelerating topline growth during a quarter where the company fell short of ad revenue for the first time is what has led to the stock’s after-hours performance,” Goldman Sachs analysts wrote in a note to clients.
Related: Facebook’s Lifting of Bitcoin Ban Will Boost Cryptocurrency Market
ETFs like iShares US Technology ETF (IYW) --up 10% YTD, Invesco NASDAQ Internet ETF (PNQI) --up 20..34% YTD and Global X Social Media ETF (SOCL) --up 7.95% YTD--all took a hit today with IYW down 1.47%, PNQI down 2.10% and SOCL down 3.4%.
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