Mark Zuckerberg just lost almost $16 billion in one day

Facebook has historic stock drop in wake of scandal

By Beki Winchel | Posted

Shares in the social media giant closed at $176.26 - a drop of 18.96 percent.

Mark Zuckerberg, the chairman and chief executive of Facebook, lost more wealth in a single day than the entire market value of Molson Coors Brewing Co, or Nasdaq or Ralph Lauren Corp.

If the losses hold without any recovery in price, this will mean that Facebook will hold the record for the largest single-day drop of any company in stock market history in the United States.

Facebook hit the headlines earlier this year when it came to light that Cambridge Analytica had used data, harvested from Facebook users, to target U.S. voters with personalised political advertising, based on psychological profiles. 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.

Even with the stock selloff, Facebook remains massively profitable and has a growth profile traditional media companies would kill for.

That could be down to the drop being a one-off, potentially following the Cambridge Analytica data sharing scandal, or even the sharing of private posts belonging to some 14 million Facebook users, rather than a downward spiral for Facebook.

Facebook has recorded the biggest fall in corporate history as its value plunged by $120bn, when markets opened in NY.

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Facebook had the largest-ever loss of value in one day for a USA traded company. In recent trading, they were down $43.99, or 20.2%, to $173.51 a share.

While gargantuan in sheer number, the drop in Facebook's market value doesn't spell the end for the company. "We're starting to see that this quarter", he said.

For Facebook, financial stumbles are rare.

Amazon has been in a race with Apple to see which company would be the first to reach a $1 trillion market cap.

Meanwhile, Facebook is also still coming to terms with the European Union's new privacy laws and the impact the rules will have on the business. The company was bombarded by public criticism over its content policies, especially in countries such as Myanmar and Sri Lanka where misinformation has led to violence. And the increased spending aims, among other things, to prevent a replay of the fake news and propaganda that Russian agents unleashed on an unguarded Facebook in an attempt to sway the 2016 presidential election. 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.

Brian Wieser at Pivotal Research Group said the company appears to have hit a "wall" on growth in advertising.

The complaint filed by shareholder James Kacouris in Manhattan federal court accused Facebook, Zuckerberg and Chief Financial Officer David Wehner of making misleading statements about or failing to disclose slowing revenue growth, falling operating margins, and declines in active users. The company's sales grew at a 42% clip in the second quarter, so the forecast implies that its growth rate for the rest of the year will be 35% or less.

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