Mark Zuckerberg lost £13 billion in five minutes this morning

Mark Zuckerberg lost £13 billion in five minutes this morning

According to Business Insider, a Facebook investor has drawn up a new proposal to oust Mark Zuckerberg as chairman, 10 months before the social networking giant's next shareholder meeting. The report was a relief to investors in the U.S. technology sector, still reeling from a profit warning by Facebook Inc Wednesday that plunged its stock 19 percent.

Facebook had 2.23 billion monthly users as of June 30, up 11 percent from a year earlier, but well short of what industry analysts had been expecting.

Facebook missed quarterly revenue expectations for the first time in years as shares of the social media giant dropped 8 percent in after-hours trading Wednesday. "In the USA and Canada, Facebook's daily active users remained flat sequentially at 185 million, while the number actually fell in Europe, falling to 279 million, down from 282 million", writes Fox News. This translates to a US$124 billion decline in market capitalization, which is the largest ever loss of value in one day for a USA traded company.

Patsky said his company's next ask of Facebook and its board is just that - a separation of chair and CEO.

Describing the announcements as "bombshells", Baird analysts said the issues were to a large degree "self-inflicted" as Facebook sacrifices its core app monetisation to drive usage.

Facebook suffered a blow in China on Wednesday when regulators there withdrew their approval of a company innovation hub to support local startups, the New York Times reported on Wednesday, citing a person familiar with the matter.

"The implementation of GDPR gave a large number of Facebook users control over their privacy, and it should have been patently obvious to investors (and to us) that allowing users control would result in slightly lower engagement", he noted, alluding to Europe's General Data Protection Regulation privacy rule.

Toward the end of the call, a Jefferies analyst seemed astonished at the scale of the growth slowdown, saying it "seems the magnitude is beyond anything we've seen".

However, media buyers believe the company will bounce back.

Ben Bajarin, an analyst at Creative Strategies, calls this "new territory" for Facebook. In case of the latter, Wehner noted that "total expense growth will exceed revenue growth in 2019", pushing down operating margins.

The plunge in Facebook's share price puts the social network on track to rack up the biggest ever one-day drop in a company's market value. "That's going to have a negative impact on revenue growth", he noted.

Several factors this earnings call contributed to Facebook's disastrous loss in market value. "Looking ahead, we will continue to invest heavily in security and privacy".

Related Articles