icon bookmark-bicon bookmarkicon cameraicon checkicon chevron downicon chevron lefticon chevron righticon chevron upicon closeicon v-compressicon downloadicon editicon v-expandicon fbicon fileicon filtericon flag ruicon full chevron downicon full chevron lefticon full chevron righticon full chevron upicon gpicon insicon mailicon moveicon-musicicon mutedicon nomutedicon okicon v-pauseicon v-playicon searchicon shareicon sign inicon sign upicon stepbackicon stepforicon swipe downicon tagicon tagsicon tgicon trashicon twicon vkicon yticon wticon fm
12 Jan, 2018 15:12

Facebook stock plunges on news feed overhaul

Facebook stock plunges on news feed overhaul

Shares in Facebook dropped by more than 4 percent ahead of Friday's opening bell after the CEO announced changes to the platform’s centerpiece news feed, which he said would hit user engagement in the near term.

The company is planning to change the filter for its news feed to prioritize what friends and family share, while reducing the amount of non-advertising content from publishers and brands. The measure is a part of a wider program aimed at prioritizing “meaningful social interactions” against “relevant content.”

“We feel a responsibility to make sure our services aren't just fun to use, but also good for people's wellbeing,” Zuckerberg said in a post on his Facebook page.

The step is seen as a deep concern for publishers, as the feed is a massive source of traffic and revenue. If the pre-market declines in shares hold, Facebook will lose nearly $23 billion from its market capitalization on Friday as a result of the move, Reuters reports.

According to Zuckerberg, the time spent on Facebook will go down, but “will be more valuable.

Shares in the social networking service have gained 48 percent over the last year, and could grow another 18 percent to $213 per share, according to analysts polled by Bloomberg. The company is set to report earnings on January 31.

According to some analysts, the measure won’t drag Facebook down due to its strong monetization, formed by a monthly active user (MAU) base of more than 2 billion.

“Facebook will continue to grow its massive global installed base in our opinion while importantly monetizing users especially on the Instagram side of the house, which remains the 'core 1-2 punch' that underlies our bullish thesis on the name,” said Daniel Ives, head of technology research at GBH Insights, as quoted by CNBC. According to the expert, the company’s stock may grow up to $225.

For more stories on economy & finance visit RT's business section