Business

Fastly Stock Just Lost a Quarter of Its Value—and It's Probably TikTok's Fault


Fastly shares were in free fall in late trading Wednesday after the content delivery and edge computing company reduced its guidance for the third quarter , apparently tied to weaker-than-expected traffic volume from the social video service TikTok.


“Due to the impacts of the uncertain geopolitical environment, usage of Fastly’s platform by its previously disclosed largest customer did not meet expectations, resulting in a corresponding significant reduction in revenue from this customer,” the company said, an apparent reference to TikTok, a unit of the China-based unicorn ByteDance.


Fastly added that in the latter part of the quarter “a few customers” had lower usage than expected.


“The current global environment has in some ways fueled our business, but [it] has also created areas of uncertainty,” Fastly CEO Joshua Bixby said in a statement.


“While our preliminary third quarter results reflect the challenges of a usage-based model, we believe the fundamentals of Fastly’s business remain strong, as does demand for our platform.”


Fastly stock was downgraded to Neutral from Outperform at Baird and to Hold from Buy at Stifel.






Powered by Blogger.