Mark Zuckerberg, Facebook boss, loses $16.8 bn in just 2 hours

MUMBAI: After a trembling quarter which was full of controversies regarding data security, Facebook faced the hit on stocks too. Following the Cambridge Analytica scandal, the social media giant lost the faith of users and faced backlash from policymakers. Now, after a poor Q2 result with a weaker-than-expected revenue growth, the company lost about $130 billion in market value in just two hours. CEO Mark Zuckerberg, the third richest man according to the Bloomberg Billionaires Index, lost $16.8 billion in extended trading.

If Zuckerberg’s loss holds through Thursday, he will slide to sixth place in the Bloomberg Billionaires Index.

In Q2, Facebook could not reach the Wall Street-projections for growth in revenue as well as daily users. Moreover, the company also told the numbers won’t get better this year. The stock slide started right after Facebook posted the result which was later triggered by chief financial officer David Wehner’s comment on slow growth throughout the year. Shares plunged as much as 24 per cent afterwards.

Facebook had 1.47 billion daily active users in June, compared with the 1.48 billion average of analysts’ estimation. In Europe, the implementation of strict new data regulations led to 1 per cent decline in daily visitors. Even in its biggest markets, the US and Canada, the user base did not grow. The company added 22 million daily active users, lower than the 41 million it added in the same quarter a year earlier. While analysts projected $13.3 billion, the revenue increased 42 per cent to $13.2 billion in the quarter.

“I think many investors are having a hard time reconciling that deceleration,” an analyst at Jefferies LLC Brent Thill told Facebook executives. “It just seems like the magnitude is beyond anything we’ve seen, especially across a number of the tech (companies) we cover,” he added. However, some analysts think the harsh truth is that the platform can’t grow forever. “The core Facebook platform is declining,” an analyst at Pivotal Research Group Brian Wieser said.

Facebook will increase spending to make investments in video content, artificial intelligence, and virtual reality. The company is growing its video play with new sports broadcasting rights and content deal for news. However amid all new plans also, it could not live up to expectation. Since 2015 Q1, this is the first time it could not meet revenue growth.

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