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Because of COVID-19, consumer demand for advertising (30% to 45% of Facebook’s total revenue) has fallen. Facebook (FB) stock has also suffered. Today, it has opened at $158.92.
Facebook Inc (NASDAQ: FB) stock is suffering as the coronavirus continues its spread and badly affects the market. On Tuesday, the Facebook stock closed at $161.23 and further dropped in the after-hours sales. Today, it has opened at $158.92 but already tanked by 3.33%. At the moment of writing, the Facebook stock price makes up $155.09. What will happen in the next few hours is unpredictable. As experts have explained, Facebook stock drops as a result of its weakening advertising business. It is suffering mainly in countries where actions taken against COVID-19 are the most drastic.
Why Facebook (FB) Stock Drops
Facebook explained in its blog post:
“As the pandemic expands and more people practice physically distancing themselves from one another, this has also meant that many more people are using our apps.”
The social networking company continued:
“Much of the increased traffic is happening on our messaging services, but we’ve also seen more people using our feed and stories products to get updates from their family and friends. At the same time, our business is being adversely affected like so many others around the world. We don’t monetize many of the services where we’re seeing increased engagement, and we’ve seen a weakening in our ads business in countries taking aggressive actions to reduce the spread of COVID-19.”
How Facebook Fights Coronavirus?
As well as other tech companies, Facebook has been looking for ways to save its global business. The company has recently joined WHO’s efforts to create a hackathon to combat the effects of the coronavirus. Microsoft, Twitter, TikTok, Giphy, Slack, and Pinterest are also onto it.