After Facebook Stock Plunge, Mark Zuckerberg Worth Less Than Warren Buffett

After Facebook Stock Plunge, Mark Zuckerberg Worth Less Than Warren Buffett

After Facebook Stock Plunge, Mark Zuckerberg Worth Less Than Warren Buffett

Facebook has grappled with months of scrutiny over Russian misuse of the platform in the 2016 US presidential campaign and the harvesting of its users' data through the political consulting firm Cambridge Analytica. Leading up to the new stricter privacy rules, Facebook notified users across Europe of pending changes to its privacy policies.

Shares tumbled 20 percent subsequent to the company reporting its second-quarter earnings - after the market closed.

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.

Its $1.74 earnings per share beat expectations of $1.72.

Sales grew 14 per cent to $US13.2 billion in the second quarter compared with $US9.3 billion a year ago. Worldwide daily user growth for Facebook's namesake service slid for its sixth straight quarter, bringing it to almost 1.5 billion users in the second quarter.

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.

Facebook reported its second quarter earnings Wednesday and the results, which were worse than expected, sent the company's stock into free fall, wiping out more than $100 billion off Facebook's market value.

The site also brought in 1.47 billion global daily active users (DAUs) during its second quarter, below the 1.49 billion that analysts were projecting, according to a StreetAccount and FactSet outlook. "It just seems like the magnitude is beyond anything we've seen, especially across a number of the tech (companies) we cover".

Wehner warned analysts not to expect the company's financial results to get better anytime soon.

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According to the research firm, Facebook-owned Instagram is making up for some of the slowdown in growth at social network and will generate $8.06 billion in worldwide ad revenue this year.

"We also believe "considerable strength" from the Instagram side of the house has neutralized any soft spots on the core Facebook platform in our opinion". He said the challenges included regaining public trust as well as increasing the number of people joining Facebook and the time they spent on the platform.

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.

Wall Street's confidence backing this social media giant is strong, with TipRanks analytics showcasing FB as a Strong Buy. The company remains in a dominant position in mobile advertising alongside Alphabet Inc.'s Google.

"When it comes to much slower revenue growth, they're talking about currency headwinds, but more we think it's due to slower user growth given GDPR and more focus on privacy", said Morningstar analyst Ali Mogharabi.

Still, the news caught analysts by surprise after 12 straight quarters in which Facebook exceeded analysts' expectations. It was the first full financial report since Facebook became embroiled in the Cambridge Analytica scandal in March.

For advertisers, though, Facebook and Instagram are performing as well as ever.

Facebook's headcount increased 47% year-on-year, to 30,275 as of June 30, 2018.

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