This is Why Facebook Shares Just Popped

Shares of social media giant Facebook were headed higher on Wednesday after the company reported its financial report. Shares saw a gain of 9% in after-hours trading.

Traders were more focused on the company reporting revenue that beat expectations while matching expectations for its daily active user growth. This is compared to the news that the company would take a one-time charge as much as $5 billion over an ongoing FTC inquiry.

For the first quarter, Facebook reported earnings per share of 85 cents. Revenue at $15.08 billion was higher than the $14.98 billion expected. Daily active users at 1.56 billion was in line with expectations. Monthly active users at 2.38 billion was higher than the 2.37 billion expected.

The FTC has been inquiring with Facebook since March of last year over the Cambridge Analytica scandal where the political consulting firm had gained access to 87 million Facebook users’ data improperly.

“We estimate that the range of loss in this matter is $3.0 billion to $5.0 billion,” Facebook said. “The matter remains unresolved, and there can be no assurance as to the timing or the terms of any final outcome.”

Facebook COO Sheryl Sandberg on Wednesday said the company now has 3 million advertisers using Stories ads across Instagram, Facebook and Messenger. “Stories are an increasingly important growth opportunity,” she said.

“We are helping advertisers keep up with the shift in how people are sharing just as we did with mobile.”
Chief Financial Officer David Wehner said, “Ultimately, we believe we can increase demand for Stories as we attract more advertisers and bring more effective direct response units to Stories, and over time that will play through to increased prices.”

Disclaimer: We have no position in Facebook, Inc. (NASDAQ: FB) and have not been compensated for this article.