Skip to main content
Tech

Here’s How Zuckerberg Lost $15.4 Billion

In what is being reported as the biggest stock-market wipe-out in US history, Facebook’s shares went down approximately 19 percent in response to the downfall in the company’s revenue and user growth. The drop resulted in a $120 billion fall in the company’s value and a $15.4 billion fall in Zuckerberg’s personal wealth, moving him down to be the sixth-richest person in the world, according to the Forbes Real-Time Rankings.
 

 

A post shared by Bloomberg (@bloombergbusiness) on


The triggers to this were a few “bombshells,” as was termed by an analyst, dropped during a call to investors for the second quarterly report by the chief financial officer. The slow growth rates and earnings for this quarter compared to the first one were anyway making investors wary, but the company’s forecast of slower growth and less earnings for the coming quarters, and an increase in spending on security and privacy controls (the aftermath of the Cambridge Analytica mess) prompted investors to get more startled.

Facebook had missed the expectations analysts had set for them in terms of growth and the number of daily active users, which had dropped in European markets and showed no considerable growth in the US.
 

Here’s How Zuckerberg Lost $15.4 Billion
(Photo: Getty Images)


During the call, David Wehner, Facebook’s Chief Financial Officer, said, “Our total revenue growth rates will continue to decelerate in the second half of 2018, and we expect our revenue growth rates to decline by high-single digit percentages from prior quarters sequentially in both Q3 and Q4.”

He justified these trends by attributing them to currency rates, investment in activities such as ‘stories’ that according to him have lower levels of monetisation and the aforementioned increased spending on security.

In a post on his home turf, Zuckerberg said: “As I've said in past quarterly updates, we're investing so much in security that it will significantly impact our profitability.”
 

By maxim