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Zuckerberg loses $16 billion in record Facebook fall

28 July, 2018, 10:14 | Author: Shawna Walton
  • Zuckerberg loses more than $15 billion in record Facebook fall

"The bundling of consent for Facebook to use consumer data with access to the platform appears to be an aggressive interpretation of GDPR, and one that might be more subject to eventual regulatory action", Wieser said.

Facebook share prices dropped nearly 20 percent Thursday. The data released by Facebook in the Q2 2018 earnings call indicates that even though revenue increased 42 percent to $13.2 billion, it was still lesser than the Wall Street estimates of $13.3 billion. The last time the company missed revenue estimates was the first quarter of 2015.

FACEBOOK HAS BLED one million active monthly users since the General Data Protection Regulation (GDPR) came into effect.

More than $109bn (£83bn) has been wiped off Facebook's market value, including a $14.5bn hit to the fortune of founder Mark Zuckerberg after the company warned investors that user growth had slowed in the wake of the Cambridge Analytica data leak scandal. "We're starting to see that this quarter", he said.

Describing the announcements as "bombshells", Baird analysts said the issues were to a large degree "self-inflicted" as Facebook sacrifices its core app monetisation to drive usage.

Yet Facebook is hardly a stranger to a volatile stock price and has rebounded from previous mishaps, including Cambridge Analytica.

Facebook's stock plummeted following a dire second quarter briefing focusing on slowing ad market growth and increased spending on data security following the Cambridge Analytica scandal and new European Union privacy rules.

"The guidance from management over their expectations for revenue growth to decelerate so markedly for the rest of the year did take us, and the market, by surprise", said Christopher Rossbach, chief investment officer at J. Stern & Co.

During the call, Facebook Chief Executive Mark Zuckerberg tried to recast the disappointing earnings.

Facebook's shares later rebounded, but at the time of this writing they remained deep in the red, down by a little more than 20%.

Several factors this earnings call contributed to Facebook's disastrous loss in market value. The number of active users globally was also up.

For more than a year - ever since Zuckerberg published a 5,000 word manifesto arguing that Facebook needs to make the world a better place by bolstering civic engagement and addressing social ills - the company has seemed torn between its philosophical mission and its economic one. "Looking ahead, we will continue to invest heavily in security and privacy".

"Unlike Netflix, whose quarterly shortfall we saw as temporary, here we see an evolution of the story, albeit a portion of which we expected", said Daniel Salmon, analyst at BMO Capital Markets.

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