Facebook (FB) Shares Hit After Warning on Impact of Apple's (AAPL) Privacy Changes

September 22, 2021 12:44 PM EDT

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Facebook (NASDAQ: FB) was among the worst performing mega-cap stocks on Wednesday, falling as much as 4.6%, compared to a 1% gain in the Nasdaq 100.

Weakness followed a blog post by the company that acknowledged it is underreporting the results of its advertising business on Apple (Nasdaq: AAPL) iOS devices due to recent privacy changes.

"The cost of achieving your business outcome may have increased and it’s also gotten harder to measure your campaigns on our platform. In some cases, this is due to underreporting on our part," wrote Graham Mudd, Facebook's VP of Product Marketing. "Our estimate is that in aggregate we are underreporting iOS web conversions by approximately 15%; however there is a broad range for individual advertisers. We believe that real world conversions, like sales and app installs, are higher than what is being reported for many advertisers. We are committed to helping you better measure these outcomes and improve your performance."

The disclosure appears to have caught some Facebook investor off guard, despite past warning about the potential impact from Apple.

Facebook typically reports third quarter earnings at the end of October -- plenty of time for investors and analysts to ponder the potential EPS impact from today's update. Investors will also be looking for Facebook to provide clearer answers on the longer-term effect of the privacy changes and its workarounds.

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