Facebook Stock Price Soars Despite Ongoing Bitcoin Advertising Lawsuit
Facebook released its Q1 earnings on April 25 and the numbers were better than expected. Despite the Cambridge Analytica scandal and an ongoing lawsuit related to fake bitcoin investing ads, Facebook beat expectations and sent its stock price soaring.
Going into the earnings report, Facebook shares had lost 9.5% of their value from January 1 to April 25. Facebook released its first quarter earnings after the closing bell on Wednesday afternoon. After crushing both revenue and earnings estimates, Facebook’s stock rose nearly 8% in after-hours trading.
Facebook clearly hasn’t faced any major repercussions – at least on its bottom line – for the ongoing Cambridge Analytica scandal and the cryptocurrency advertising lawsuit.
PERSONAL ANNOUNCEMENT: Tomorrow AM. I will issue High Court proceedings against Facebook in a campaigning defamation case, as it repeatedly publishes fake Bitcoin code type ads for get-rich-quick scams with my name/pic in.
FULL statement here https://t.co/S4HiOQAShk Do share
— Martin Lewis (@MartinSLewis) April 22, 2018
This past week, British personal finance guru Martin Lewis announced he was suing Facebook for allowing scammers to use his identity in dozens of advertisements. Lewis’s image and persona had been used to promote various cryptocurrency scams – including “get rich quick” schemes related to bitcoin, binary options trading, and cryptocurrency investing.
We've been swamped with reports of fake ads – this week. I am looking at options across all platforms. Yet Facebook has had by far the most and been on notice by far the longest. https://t.co/CCwZDGMMuc
— Martin Lewis (@MartinSLewis) April 25, 2018
Lewis claims Facebook had published over 50 fake ads using his likeness. He specifically mentions ads that promoted Bitcoin Code and Cloud Trader, both of which promised investors easy profits from trading binary options and investing in cryptocurrencies. Lewis claims one woman – a fan of his – had lost 100,000 GBP after clicking on one of the fake advertisements and following through with the offer.
Lewis is the founder of a blog called MoneySavingExpert. He has frequently appeared on television programs in the UK to promote various investing and money-saving strategies.
Cryptocurrency scammers took advantage of Lewis’s strong standing to launch a series of Facebook advertisements featuring Lewis’s persona – and thereby damaging his reputation. Lewis’s image appeared in fake Facebook advertisements that resembled real TV news sets and websites resembling the BBC.
Obviously, all of this controversy wasn’t enough to prevent Facebook’s revenues and profits from soaring. Facebook reported revenue of $11.97 billion, up 49% over the year and surpassing the $11.41 billion expected by analysts. User growth numbers rose 13% year over year to 2.2 billion people, while daily active users also increased 13% to 1.45 billion. Facebook also announced a $9 billion stock buyback plan.
Take a look at what Mark Zuckerberg says will be a Facebook goals moving forward.
We just announced our quarterly results and community update. Despite facing important challenges, our community…
Clearly the “delete Facebook” movement and cryptocurrency advertising scam didn’t affect Facebook’s Q1 earnings – but we may see the long-term effects over the coming year.