By Aaron Pressman and Adam Lashinsky
July 26, 2018

This is the web version of Data Sheet, Fortune’s daily newsletter on the top tech news. To get it delivered daily to your in-box, sign up here.

The nearly 25% plunge in shares of Facebook Wednesday afternoon is a one-day case study for investors in the weird ways of technology stocks.

You’d think from Wall Street’s reaction to Facebook’s quarterly financial results that the company was being punished for gutting the media industry and filleting democracies. That might have constituted a sort of harsh commercial justice. But it’s not so. On the contrary, Facebook continues to grow rapidly and print cash. Users haven’t given up their Facebook habit, and advertisers continue to push their wares there. Instagram, part of Facebook’s shrewd portfolio-theory approach, is clicking at a high shutter speed.

What happened then? Simple: Facebook’s growth isn’t what it had been, and the company took the opportunity to curb the enthusiasm around future growth. When a high-growth company stalls—regardless of their healthy profits—investors lose faith.

Veteran tech-stock watcher Gene Munster thinks Facebook is sandbagging, an ungenerous way of suggesting it is purposely lowering expectations. “The company has a track record of resetting revenue growth and expense expectations only to turn around and exceed those expectations the following quarter,” he wrote Wednesday afternoon. “We suspect Facebook is sticking with its historical playbook and will, in fact, beat these lower numbers.”

The end is not nigh for Facebook. Nor should the pressure be off the company for all the damage it has done.

***

One careful Data Sheet reader (Alan Murray) noticed something amiss on Tuesday. I cited a Wall Street Journal reference attributed to eMarketer that Google accounts for 31% of the global advertising market. That figure correctly refers to Google’s share of the global digital ad market.

Adam Lashinsky
@adamlashinsky
adam_lashinsky@fortune.com

SPONSORED FINANCIAL CONTENT

You May Like