After another public relations debacle for Facebook in which a Trump-affiliated data firm was accused of improperly gleaning information on more than 50 million users the company’s stock plummeted nearly 7% through 1 pm Eastern Time on Monday erasing $37 billion of market value. The decline had the biggest impact on Mark Zuckerberg Facebook’s co founder and CEO whose net worth fell $5.1 billion.
Zuckerberg who owns about 16% of Facebook’s shares is now worth an estimated $69.5 billion according to Forbes real time rankings of the world’s billionaires. He is currently the seventh richest person on the planet down from fifth after falling behind Zara cofounder Amancio Ortega and Carlos Slim Helu Mexico’s richest person.
It’s the latest in a string of bad news for Facebook. Last year it was blamed for among other things facilitating misinformation contributing to polarization in Britain Austria Italy and elsewhere and enabling foreign political interference. Already 2018 has been no less turbulent.
On March 17 news broke that data firm Cambridge Analytica which worked as a consultant for Donald Trump’s presidential campaign allegedly “harvested private information from the Facebook profiles of more than 50 million users without their permission.” The report published in the New York Times has exacerbated concerns that the social media giant can be exploited for partisan gain. On Sunday March 18 lawmakers in both the United States and United Kingdom pressed Facebook for more details on the matter.
In the Times report Facebook’s deputy general counsel Paul Grewal called the incident “a scam and a fraud.” “We will take whatever steps are required to see that the data in question is deleted once and for all and take action against all offending parties” he added. Cambridge Analytica was suspended from the platform soon after.
The data consultancy has been in the headlines since Trump’s victory in November 2016. The firm had targeted voters and helped tailor political messaging for his campaign. Amid the post election upheaval Cambridge Analytica’s CEO Alexander Nix told Forbes in December 2017 that the company would de emphasize its political work in the U.S. He further stated that the business had “no involvement with Russians” an assertion that was also disputed in the Times this week.
Zuckerberg 33 founded Facebook in 2004 as a 19 year old student at Harvard. He dropped out during his sophomore year to focus full-time on the company which quickly expanded past its initial niche on college campuses. Today Facebook boasts more than 2 billion monthly active users.
Together with Google, Facebook accounts for over 60% of online advertising dollars according to Statista. As the firm’s financial and social power continues to intensify some have called for regulatory intervention.
This week’s tumult will do nothing to ease that pressure.