Facebook shares slipped as much as 200% in premarket trading on Tuesday, as analysts said they expected the social media giant to miss Wall Street’s expected cash return by a larger amount than expected.
Facebook shares have plunged over the past year amid a flood of new advertising revenue and the company’s $1 billion acquisition of Oculus VR.
The company said it would be offering cash back on its stock through the end of 2019.
“We anticipate our cash rate to be higher than we originally expected, which would likely cause us to miss our cash return target,” said Andrew Fassbender, chief financial officer for Facebook, in a conference call with analysts.
Facebook’s stock was down more than 5% at $20.60 in pre-market trading, while the S&P 500 index lost more than 1% in after-hours trading.
“Our forecast for cash from operating activities in 2019 is significantly lower than we previously anticipated, and our cash flow outlook is significantly weaker than we initially anticipated,” Fassbert said.
Facebook, founded in 2004, is the world’s largest social network, with more than 180 million users worldwide.
Facebook says it is targeting a revenue of $10 billion in the second quarter, and it said it will spend $7.4 billion in 2019 to buy Oculus VR, which is developing virtual reality applications.
Oculus, a San Francisco-based company, has been working on VR applications for years.
Facebook said Oculus is working on a headset that it plans to debut at the Consumer Electronics Show in Las Vegas on Wednesday.
Facebook stock closed down 0.9% to $17.85 in preworkout trading on Monday.