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Is it over? Has social media already peaked?
After revolutionizing the way people share information with each other, is the era of growth for social media companies over?
Last week was a disastrous one for Facebook and Twitter, the two best known social media platforms. Yoree Koh and Michael Wursthorn report for The Wall Street Journal:
Twitter said Friday that its number of monthly users dropped in the second quarter and could continue to fall as it purges fake accounts, results that echoed Facebook’s bombshell guidance Wednesday that its growth is expected to slow through the end of the year.
Both companies suffered share-price declines of more than 20% after results. Facebook’s drop of over 19% on Thursday lopped more than $119 billion from its market value—the biggest single-day drop in U.S. market history. Twitter lost almost $7 billion.
“We’re two for two being down 20%,” said Brent Thill, an analyst at Jefferies, adding, “It has not been a great week.”
The S&P 500 dropped 1% over the last two trading days of the week, its largest two-day point and percentage decline this month, as the disappointing earnings reports put pressure on the technology sector. The tech-heavy Nasdaq Composite suffered a bigger loss of 2.5% over the same period.
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