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

Randal Sanchez
July 26, 2018

Facebook CEO Mark Zuckerberg could slide to sixth place from third on the Bloomberg Billionaires Index if the downward trend following late trading on Wednesday in the United States continues through Thursday. The company's user numbers also came below expectations, with the growth in monthly users stalled in the U.S. and down slightly in Europe.

The 34-year-old Facebook billionaire, who had been worth as much as $86.5 billion when Facebook stock traded at an all-time high earlier in the day, now has a net worth of about $68.9 billion, based on regulatory filings with the U.S. Securities and Exchange Commission.

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 said it had 1.47 billion daily active users in June, compared with the 1.48 billion average of analysts' estimates compiled by Bloomberg. Facebook is rolling out a version of those protections to the rest of the world.If users choose to share less data with Facebook, that could hamper the company's ad-targeting abilities, making it less attractive to marketers.

Separately Wednesday, Facebook general counsel Colin Stretch, who advised the company through a series of probes and investigations into data privacy, said he would be leaving for personal reasons.

The shift in Facebook's business fortunes follows a series of crises that began in late 2016 with the revelations that it had become a prime distributor of misinformation.

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Strong ad sales from Google, which is Facebook's main competitor for online advertising, had sent expectations for the social network's earnings up, along with its stock price. It owns three other properties with more than 1 billion users: WhatsApp, Messenger and Instagram.

Wehner said the "deceleration", as he termed it, is "a combination of factors", including the rising USA dollar; what Wehner called the company's newfound "focus on growing engaging new experiences like Stories and promoting of those; giving greater controls to users of the service people who use service for privacy". The company doesn't break out Instagram's revenue.

Facebook forecast similar increases for the second half of the year, also citing spending on video content and marketing.

Shares, which had declined about 7 per cent in extended trading on Wednesday (July 25), fell as much as 23 per cent after Wehner's comments on a conference call with analysts, wiping more than US$130 billion (S$176.55 billion) off the company's market value.

Zuckerberg said Wednesday that he was hopeful Facebook would be able to limit disinformation and fake accounts, and that the company was able to do so in elections this year in France, Mexico and Germany. But Facebook, which reported sales growth averaging 50 percent the past 10 quarters, may just be lowering the bar so it can win back confidence in future quarters.

Analyst Ross Sandler with Barclays asked if revenue growth was set to drop to "around 20% by the fourth quarter of this year".

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