Published: Thu, July 26, 2018
Finance | By Cynthia Curry

Mark Zuckerberg loses $16.8 billion in a snap as Facebook plunges

Mark Zuckerberg loses $16.8 billion in a snap as Facebook plunges

Chief executive Mark Zuckerberg told the call the tech giant has been investing heavily in "safety, security and privacy" after being rocked by concerns of manipulation of the platform to spread misinformation and the hijacking of user data.

Adding fuel to the fire, Facebook expects total revenue growth to decelerate in the second half of 2018, and revenue growth rates to decline by high single-digit percentages from prior quarters sequentially in both Q3 and Q4.

In fact, it would have wiped out 87 percent of the billionaires in Bloomberg's index.

Revenue increased 42 percent to $13.2 billion in the quarter.

Facebook also reported that its user base in Europe had shrunk because of a new privacy law there, marking one of the few times in the social network's history that it has reported a user decline in any region.

But the company's ad growth engine contended with disruptions in its most lucrative markets.

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The move helped police get to the scene on time and respond to the incident at the earliest, police said at the press briefing. Video reportedly taken from the scene captured the sound of gunfire as pedestrians ducked into nearby buildings.

Facebook founder Mark Zuckenberg, meanwhile, lost $16.8 billion in personal wealth at one point Wednesday on his company's stock downturn, according to Bloomberg Business News. This week, Colin Stretch, who led Facebook's investigation into Russian election interference and who testified before Congress last year on Facebook's behalf, said he would leave the company by the end of the year.

At the same time, it could be an indication that the appeal of Facebook is slowly wearing thin, especially following all the privacy issues it has recently suffered. Facebook's results prompted selling in other Nasdaq listings, including media and advertising rivals Inc, Netflix Inc and Alphabet Inc. "That said, Facebook still has some wood to chop ahead both on the regulatory as well as user/advertiser front which must be successfully managed going forward", the analyst added. The company's user numbers also came below expectations, with the growth in monthly users stalled in the USA and down slightly in Europe.

In announcing its latest earnings on Wedneday, the social media company reported 2.23 billion monthly active users, shy of Wall Street forecasts of 2.25 billion.

According to the research firm eMarketer, Facebook is expected to hold an 18 per cent share of the US$273.29 billion worldwide digital ad market, behind Google's 31 per cent.

For almost two years, Facebook has appeared bulletproof despite a series of scandals about the misuse of its giant social network. Facebook disrupted some business by putting in place new rules to get all political advertisers to verify their identities. The company owns three other properties with more than 1 billion users: WhatsApp, Messenger and Instagram. The company said headcount was 30,275 as of June 30 - an increase of 47 percent year over year.

Despite its quarterly disappointment for many investors, Facebook-whose shares were up 23% this year as of Wednesday's market close-is in an enviable position. Given all the questions about the misuse of the platform, "to explain that there are a couple million people who chose not to continue using Facebook is unsurprising", said Brian Wieser, an analyst at Pivotal Research.

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