Zuckerberg loses US$15.9B in a snap as Facebook plunges

Zuckerberg loses US$15.9B in a snap as Facebook plunges

Zuckerberg loses US$15.9B in a snap as Facebook plunges

The sudden drop in Facebook stock was a result of the announcement of second-quarter earnings which did not meet the companies predicted numbers.

Facebook has been left surrounded in a privacy scandal after it allowed an app to harvest data from 87 million user profiles around the world, which was then used by Cambridge Analytica in the 2016 USA presidential campaign and in the Brexit referendum. Zuckerberg's paper fortune fell by $14.5bn from $86.5bn Wednesday to $72bn on Thursday, sending him tumbling from the third-richest person on the planet to sixth.

But revenue - up 42 percent to $13.23 billion- was slightly below the $13.34 that Wall Street was expecting. It reported revenue of $13.2 billion for the quarter, missing Wall Street estimates and rattling investors. But the slowdown in growth has spooked investors. The tech giant said it expects revenue growth to slow as it "puts privacy first". At that point, the stock was still recovering from an earlier battering over its big privacy scandal, in which a political consulting firm with ties to President Donald Trump improperly accessed the data of tens millions of Facebook users. It reported 2.23 billion monthly active users and 1.47 billion daily active users, which were both up 11 percent year-over-year but narrowly missed estimates. And it continued to suffer fallout from investigations into Russian manipulation of the platform during the 2016 USA presidential election.

Despite the focus on Facebook's role in the affair, its shares have increased 23 percent since the beginning of the year, compared with a 6.5 percent rise for the Standard & Poor's 500 index.

The company also said that revenue growth from emerging markets and the company's Instagram app, which has been less affected by privacy concerns, would not be enough to fix the damage.

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"It wouldn't be surprising if a couple million very irritated Brits left Facebook", says Brian Wieser, analyst with Pivotal Research.

The number of daily active users in Europe fell by 3 million people from the first quarter, dropping to 279 million. Other markets offer much less value: Asia-Pacific users rack up just $2.61 in revenue, and the rest of the world lumped together, a mere $1.91.

Amazon's stock is already up almost 72 per cent in the a year ago and Amazon is getting closer to surpassing iPhone maker Apple as the world's most valuable company.

Facebook tried to soften the blow by announcing a new metric. But Facebook said that the drop in users was consistent with the previous quarter's outlook and did not say if it expected the decline to last. "Looking beyond 2018, we anticipate that total expense growth will exceed revenue growth in 2019".

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