A Blueprint for Digital Companies’ Financial Reporting
AUGUST 3, 2018
On June 25, 2018, Facebook lost market capitalization of more than $100 billion in just two hours of trading after it announced its quarterly performance, despite exceeding analysts’ earnings forecasts. This example illustrates that investors consider information beyond just earnings as value-relevant. Information on revenue and its drivers are, without doubt, the digital companies’ most value-relevant disclosures from the investors’ perspective.