Over $118bn wiped off Facebook’s market cap after growth shock

More than $118bn (£90bn) has been wiped off Facebook’s market value, including a $16bn hit to the fortune of its founder, Mark Zuckerberg, after the company told investors that user growth had slowed in the wake of the .

Facebook’s shares plunged by 19.5% on Thursday when the stock market opened in New York, a day after the Silicon Valley company revealed that since the Observer revealed the Cambridge Analytica breach of 87m Facebook profiles and the introduction of strict European Union data protection legislation.

The collapse of Facebook’s share price puts the social network on track for the biggest ever one-day drop in a company’s market value. Shares fell to $175 in early trading on Thursday, valuing the company at $501bn, a drop of $118bn from a record high of $619bn on Wednesday. The previous biggest collapse came in 2000, when Intel lost $91bn in a day.
The single biggest loser is Zuckerberg, who owns nearly 17% of the company and whose paper fortune fell from $86.5bn to $70bn, sending him tumbling from the third-richest person on the planet to the sixth.

The collapse came after the company told investors to expect a significant decline in growth rate, and revealed that the number of users in Europe had fallen from 282 million to 279 million.

David Wehner, Facebook’s chief financial officer, said on Wednesday that the company’s decision to give its users “more choices around data privacy” following the Cambridge Analytica scandal “may have an impact on our revenue growth”.

“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,” he said. “Looking beyond 2018, we anticipate that total expense growth will exceed revenue growth in 2019.”

Leave a Reply