Data Sheet—Making Sense of Facebook’s Deep Plunge

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.

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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.

NEWSWORTHY

Not on the menu. Unable to get Chinese approval, Qualcomm abandoned its pursuit of NXP Semiconductors and will have to pay a $2 billion termination fee. The former $44 billion acquisition target will remain independent for now while Qualcomm is vowing to spend $30 billion on stock buybacks. Qualcomm also said it expects Apple will drop its wireless modems entirely from the iPhone. Investors seem to prefer the buyback over the purchase, as shares of Qualcomm gained 5% in premarket trading on Thursday. But shares of NXP dropped 7%.

Teflon coated. Elsewhere on Wall Street, chipmaker Advanced Micro Devices proved it could withstand a drop in buying demand from cryptocurrency miners. Revenue jumped 53% to $1.76 billion and adjusted earnings per share rose to 14 cents from a 1 cent loss a year earlier. AMD shares surged 6% in premarket trading. At PayPal, total payment volume rose 29% to $139.4 billion and revenue gained 23% to $3.86 billion. But a weaker-than-expected forecast disappointed and the company's shares fell 4% in premarket trading. And Spotify shares were down 4% after the music streaming company said its premium subscriber base grew 40% to 83 million and revenue increased 26% to $1.5 billion.

Like a sieve. A security researcher found that identity protection service LifeLock wasn't protecting its customers' email addresses, which could be seen on the web. The service went offline briefly on Wednesday to fix the leaky web page.

Sweet buttercream icing. Last week, initial reviews found that the Intel six core i9 chip inside Apple's newest MacBook Pro laptop was slowing itself too much to avoid overheating. This week Apple released a patch and re-reviews found a big speedup in challenging app tasks like encoding video clips. Huzzah.

A new recipe. Pharmaceutical giant GlaxoSmithKline invested $300 million in genetic testing firm 23andMe. The money accompanies a partnership that will allow Glaxo to use data collected by 23andMe to uncover future areas for drug research. "Drug targets with genetic validation have a significantly higher chance of ultimately demonstrating benefit for patients and becoming medicines,” Glaxo's chief scientific officer Hal Barron said.

Out of the frying pan. The once-ubiquitous (and hated by Steve Jobs) web display software known as Flash is going away in less than two years, according to its maker, Adobe. But the U.S. government hasn't got the message, prompting Sen. Ron Wyden to send a letter to three federal agencies to get a move on removing Flash pronto. The software has "serious, largely unfixable cybersecurity issues," Wyden wrote.

FOOD FOR THOUGHT

Silicon Valley favors the bold, with constant moves to disrupt industries, learn from failure, and change the world. That attitude has filtered down to the charities that want to tap into some of the valley's wealth for traditional causes like feeding the hungry and housing the homeless. Alana Semuels has a deep dive for The Atlantic into how non-profits are trying to attract tech donations by adopting tech strategies and lingo. Take the example of Peter Fortenbaugh, executive director of the Boys & Girls Clubs of the Peninsula, for example:

“Traditionally, we were a safe place to hang out, but in 2018, that’s just as important, but no longer sufficient,” he told me. He started adding on educational and vocational training programs to prepare kids to work in Silicon Valley. He launched a summer camp that emphasizes STEM learning and works with kids falling behind in reading. He started sending donors an annual “Report to Stakeholders” with detailed data about impact and how what the club does now compares to previous years.

And to really bring the money rolling in, he launched a “Shark Tank” event, in which “entrepreneurs”—employees and students—pitch wealthy Silicon Valley donors on certain programs, outlining just how much money they need and what “equity” the donors will receive on those programs. One presentation pitched the “sharks” a “unique and innovative cross-sector partnership”—a summer learning program—and talked about the program’s “marginal costs,” assuring potential donors that BGCP’s cost per student was lower than that of competing programs. The approach has been remarkably effective in bringing in money: Last year, the organization raised $2.7 million in 45 minutes from donors including George Roberts, the billionaire founder of investment firm Kohlberg Kravis Roberts & Co., who lives in nearby Atherton.

IN CASE YOU MISSED IT

Why YouTube Deleted Videos From InfoWars Founder Alex Jones and Gave Him a 'Strike' By Natasha Bach

Which Mobile Network Is Really the Fastest? By Aaron Pressman

Elon Musk Might Call Your Boss If You Write About Shorting Tesla Stock By Glenn Fleishman

Google to Sell Titan Security Key to Fight Phishing Attacks By Jonathan Vanian

Iran Is Planning to Launch Its Own Cryptocurrency In Order to Bust U.S. Sanctions By David Meyer

Apple's Cheaper 2018 iPhone Could Be Delayed By Don Reisinger

Why VC Firm Fifth Wall Ventures Is Bullish on the Tokenization of Real Estate By Polina Marinova

BEFORE YOU GO

The controversial summit between President Donald Trump and Vladimir Putin raised some worries, including over the gift of a soccer ball. The Russian leader gave Trump a ball from the World Cup that had a transmitter chip built in. But fear not, the Adidas installed near-field communication chip is connected only to an Adidas phone app and can't be modified, the company says. Phew.

This edition of Data Sheet was curated by Aaron Pressman. Find past issues, and sign up for other Fortune newsletters.