Fastly Inc Shares fell more than 25% on Wednesday after hours after the software company said its biggest client, TikTok’s parent company, Bytedance Inc, did not use its product as much as expected amid a threat of ban in the US
Quickly
FSLY,
-438%
revealed in a press release that it now expects third-quarter revenue of $ 70-71 million, after previously driving sales of $ 73.5 million to $ 75.5 million The company also said that its full-year forecast should no longer be relied on and that a new forecast would be released when the company fully reported on its earnings in October 28
The company said its biggest customer is not using its products, which charge per use, as much as expected « due to the impacts of the uncertain geopolitical environment » Although Fastly did not disclosed the name of this client in the press release, Fastly admitted in documents filed with the Securities and Exchange Commission and elsewhere that its largest client is Bytedance
« The current global environment has in some ways fueled our business, but has also created areas of uncertainty, » Chief Executive Officer Joshua Bixby said in a statement “While our preliminary third quarter results reflect the challenges of a usage-based model, we believe Fastly’s business fundamentals remain strong, as does demand for our platform. »
President Donald Trump tried to ban TikTok from operating in the US unless Bytedance, based in China, transfers ownership to a US entity While there was an agreement to institute a new entity in the US with the help of Oracle Corp
ORCL,
-001%
and Walmart Inc
WMT,
-156%,
this move appears to be on hold as TikTok fights the ban through the US court system, where a judge ended the ban late last month
In its latest quarterly report to the SEC, Fastly said Bytedance was its biggest customer and contributed 12% of its revenue in the first six months of the calendar year In the announcement As of Wednesday, the company also said other customers were using its product less than expected by the end of the third quarter.
Stock quickly closed with a 44% drop to $ 12319 on Wednesday, then fell below $ 90 a share after hours after the announcement The San Francisco-based software company went public in May 2019 for $ 16 a share
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Jeremy Owens is the chief technology editor of MarketWatch and the San Francisco bureau chief You can follow him on Twitter @ jowens510
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Fastly, Stock
World news – United States – Stock quickly plunges over 25% after TikTok fails to use its software as expected
SOURCE: https://www.w24news.com
