Facebook lost approximately US$150 billion in two hours

Anna Jefferson
July 26, 2018

Chief executive Mark Zuckerberg told the call the tech giant has been investing heavily in "safety, security and privacy" after being rocked by concerns of manipulation of the platform to spread misinformation and the hijacking of user data.

His fortune tumbled in late trading Wednesday, as shares of the social media giant slid 20% in post-market trading in NY on disappointing results. It would also wipe his $13.7 billion of gains for the year, leaving him with just less than $70 billion.

Second-quarter revenue and average daily visitors fell short of analysts' estimates, according to a statement from the Menlo Park, California-based company.

The social media company has contended for years with criticism about its content policies, its failure to safeguard private data and its changing rules for advertisers.

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The proximate cause was the company's disclosure its revenue rate growth will slow precipitously in the current quarter and the next one.

Facebook announced its Q2 2018 financial results on Wednesday - and in a rare miss, it failed to hit Wall Street's expectations.

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's results prompted selling in other Nasdaq listings, including media and advertising rivals Amazon.com Inc, Netflix Inc and Alphabet Inc. Stifel analyst Scott Devitt raised his price to $242 from $202, also on the premise of Facebook's strong digital advertising business.

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 reported its slowest growth rate ever, with 2.23 billion people logging in at least once a month in June, below the 2.25 billion analysts expected. Wehner said the drop was due entirely to a data protection and privacy law that took effect in Europe in May known as the General Data Protection Regulation, or GDPR.

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The revenue shortfall reflects warnings from Chief Executive Mark Zuckerberg that Facebook's bottom line could be affected by costly measures it is taking to improve safety and security for its 2.23 billion monthly active users. Facebook has largely saturated in the USA and Western European markets, and is now looking to countries such as Brazil, India and Indonesia for new users. It owns three other properties with more than 1 billion users: WhatsApp, Messenger and Instagram.

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.

Facebook shares closed about 3% high on Wednesday during regular trade hours but dropped as much as 24% in after-hours trade following a poor earnings report.

That places Zuckerberg, who had been the world's third-richest person, at No. 6, below billionaires including Berkshire Hathaway's Warren Buffett, French business magnate Bernard Arnault, and Zara founder Amancio Ortega.

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