Mark Zuckerberg's Net Worth Down by $15 Billion as Facebook's Stocks Plummet

Last Friday saw Facebook shares drop by 19%, reaching its lowest levels in nearly three months. Around $120 billion in market capitalization is lost due to the stock dive. This includes other internet and tech stocks such as Twitter and Snap. The social media giant’s market cap closed at $629 billion last Wednesday and closed on Thursday at $510 billion. Historically, this is the largest single-day decline for any publicly held company according to Thomson Reuters.

Forbes’ real-time net worth tracker reports that although Mark Zuckerberg is still valued at around $67 billion, the stock dive has pulled his net worth down by $15 billion. This resulted from investors backing down after user and revenue growth of the company has been slowing down significantly recently.

The reason why Facebook shares plummeted

In terms of Facebook user growth, the number of daily active users from the US plateaued in the second quarter. Even worse is that of Europe’s. A huge decline in the number of daily active users was seen by the second quarter. With these in mind, revenue forecast has not been promising. Pivotal Research analyst Brian Wieser wrote in a research note, that Facebook’s days of high revenue are numbered even if the company is still growing at a fast clip.

Confirming this, Facebook CFO David Wehner has told investors that revenue growth is indeed declining at a significant rate in the next few quarters. Wehner 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.”

The company expects to invest in products such as Stories that “currently have low levels of monetization.”In addition, it is introducing new user controls that limit data-sharing with Facebook. Both are expected to impact revenue growth. Also worth noting are currency-exchange rates, according to Wehner.

And as the legal developments continue after the data-privacy scandal involving Cambridge Analytica, supporting the platform and its users will definitely restrain profit and growth in the next few quarters, added Scott Kessler of CFRA Research.

Still, Facebook continues to be profitable. The second quarter earned a 42% increase in revenue ($13 billion) and a 31% increase in net income ($5.1 billion). Compared to last year, the number of global monthly active users is up by 11% (2.23 billion).

 

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