Published: Sat, July 28, 2018
Business | By Pearl Harrison

Mark Zuckerberg’s fortune tumbles $16.8 billion in a day

Mark Zuckerberg’s fortune tumbles $16.8 billion in a day

In a research note, he said Facebook's outlook "suggests that while the company is still growing at a fast clip, the days of 30 percent-plus growth are numbered".

Instagram has grown to 1 billion monthly users from 600 million in late 2016, while Facebook's two messaging apps, Messenger and WhatsApp have each reported well over 1 billion monthly users.

That "bombshell", as one analyst termed it, played into concerns on Wall Street that Facebook's model could be under threat after a year that has been dominated by efforts to head off concerns over privacy and its role in global news flow.

The drop translates to a US$119.4 billion (NZ$176b) decline in Facebook's market capitalisation, the largest-ever daily fall in value of a USA traded company.

Other big investors of Nasdaq-listed Facebook also took a hit as disappointing second-quarter results obliterated US$119 billion of market value, the most ever in a day for a U.S. company. Daily usage was unchanged in Facebook's biggest market, the United States and Canada, at 185 million daily users.

It was filed just hours before a brutal Facebook second-quarter earnings update on Wednesday, which sent the firm's share price tumbling almost 24 per cent, wiping as much as $148 billion off its value. The company has been hiring more people and concentrating resources to improve privacy and data security, and increase policing of the site to tackle misinformation and election interference.

When Facebook warned of slower growth it tipped the balance, sending the stock tumbling.

North American DAUs remained flat despite the fallout from the Cambridge Analytica data leak scandal and fake news issues.

The drop came after the company announced Wednesday it had weaker revenue than expected. I saw them sprawled out across airports recently when I traveled, and it was definitely weird to see, letting me know they're protecting my data more, on my phone. all while I know they don't.

Many are pointing the blame at founder and CEO Mark Zuckerberg.

Mark Zuckerberg is also counting the cost of user disenchantment with Facebook.

"We think that's the right thing to do for the business", he said.

Shares plunged as much as 24% after Chief Financial Officer David Wehner said revenue growth rates would decline in the third and fourth quarters.

While gargantuan in sheer number, the drop in Facebook's market value doesn't spell the end for the company.

Now we have real-life advertising from Facebook saying it's concerned, and looking after our privacy.

In a sign of just how bullish investor expectations were, though, the collapse merely returned Facebook shares to a level last seen in early May.

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