Fastly Tanks on TikTok Revenue Hit and Analyst Downgrades
Fastly (FSLY) - Get Report shares plunged on Thursday after the cloud services company disclosed that its third-quarter revenue took a hit from less spending from its biggest customer, TikTok owner Bytedance.
A series of analyst downgrades also pushed the stock lower.
Fastly shares were down more than 28% in premarket trading after the cloud-services company warned on Wednesday that third-quarter revenue will fall short of analysts' forecasts. Fastly said it now expects revenue of between $70 million and $71 million, compared with previous guidance of at least $73.5 million.
The declines were exacerbated by downgrades from several analysts, including Baird's William Power, who cut his recommendation to neutral from outperform and lowered his one-year price target to $85 from $105. Stifel analyst Brad Reback also downgraded Fastly to hold from buy and lowered his one-year price target to $77 from $98.
President Donald Trump on Aug. 6 issued an executive order giving the popular video-sharing app 45 days to either sell its operations to a U.S. company or face a ban. TikTok has sued the Trump administration over the order.
While Oracle (ORCL) - Get Report and Walmart (WMT) - Get Report have agreed to take a stake in a reorganized TikTok, ByteDance is still working out the details with U.S. regulators.
