Facebook's slide costs Zuckerberg $17bn

EnlargeROBYN BECK  AFP  Getty Images

It's just about a fifth of his net worth.

Facebook missed projections on revenue and global daily active users this quarter after struggling with data leaks and fake news scandals. If this holds by end of trading on Thursday, Zuckerberg will slip three places down Bloomberg's billionaire index. While the company posted an earnings beat, revenue was below analysts' guidance as the company raked in $13.23 billion in sales, below the $13.23 billion that analysts were calling for.

Data pulled from Robinhood - the free stock-trading app popular with young adults - shows roughly 27,000 more users had snapped up the stock Thursday morning compared to the same time a week ago.

On Wednesday the initial fallout from Cambridge Analytica appeared in Facebook's financial results and forecast and it was a game changer.

Still, Zuckerberg assured investors that Facebook continues to see growth on its core platform, as well as its other properties, which include Instagram, WhatsApp and Messenger. The company's user base flatlined in its biggest market, the US and Canada, at 185 million daily users, while declining 1 per cent in Europe to 279 million daily users.

"Facebook is actively choosing to make less money, deprioritizing near-term monetization to drive engagement to even higher levels to capture even more of their 2.5 billion monthly users' time and attention", he wrote.

The social media platform earned $5.1 billion, or $1.74 per share, for the second quarter.

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

More likely, though, market buzzards are holding off because of how quickly some analysts are turning on the company.

Also in April, Facebook issued a statement after it was reported that "malicious actors" used the social media network's search tools to get personal information from millions of users. Facebook is rolling out a version of those protections to the rest of the world.If users choose to share less data with Facebook, that could hamper the company's ad-targeting abilities, making it less attractive to marketers. Investment company Trillium Asset Management, who has about $11 million in Facebook stock, is proposing to break up Zuckerberg's role as both chairman and CEO, Business Insider reports.

Facebook forecast similar increases for the second half of the year, also citing spending on video content and marketing. 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. In case of the latter, Wehner noted that "total expense growth will exceed revenue growth in 2019", pushing down operating margins.

Related:

Comments

Latest news

White House bars CNN correspondent from open press event
By Obama's second term, frustrated reporters crafted a list of what it considered best practices for a president. But footage of the incident shows none of the assembled press heeded aides' calls to leave at first.

Molinari shoots 2-under 69 to win Open Championship
Molinari, 35, certainly earned his Claret Jug, playing nearly flawless golf on a gusty day off the eastern Scottish coast. Junior Amateur on Saturday, beating fellow 16-year-old Akshay Bhatia 1 up in the 36-hole on Baltusrol's Upper Course.

Liverpool could have signed Alisson for a much smaller fee in 2015
I realise the mood is really positive we played a (Champions League) final - we did not win it but it was still positive. City brought in (Riyad) Mahrez.

White House blames Iran for war of words with Trump
Pompeo said, "After 40 years of tyranny, the proud Iranian people are not staying silent about their government's abuses". This article was updated to include an infographic from Statista .

Other news