It seems to be one of the steepest stock markets falls encountered by Facebook, the company on Thursday lost $130 billion in market value in just two hours, denting CEO Mark Zuckerberg’s wealth by almost $17 billion.
It is worth mentioning that Facebook stocks plunged as much as 24 per cent in after-hours trading on Wednesday and the fall even impact competitors including Snap and Twitter.
It may be noted that traders all around the world are bracing for a decline in technology company stocks after the markets open today. Worth mentioning that Facebook’s loss has been attributed to the Cambridge Analytica scandal a few months ago.
The social networking website encountered one of its biggest blow on Wednesday after the second-quarter sales and user growth fell drastically short of predictions by analysts.
The company’s sales figures are expected to remain the same this year as well, suggested people who spoke to the Wall Street Journal.
According to a report, the shares of the company nosedived 24 per cent after the CFO of the company, David Wehner, stated that the revenue growth rates would decline further in the third and fourth quarters.
This, however, came as a surprise to many analysts who were predicting strong growth as the Facebook boss had managed to jump the hurdle after the controversy came in the picture.
While Facebook shed something close to $130 billion, Zuckerberg’s personal fortune reduced by $17 billion and if his wealth does not increase, the 34-year-old social media giant would slide to sixth place from third on the Billionaires Index.
It should be noted that the sudden loss would also wipe out the $13.7 billion revenue he amassed during the year. Losing over 16 billion in a day is a major setback considering that it would have wiped out 87% of the Billionaire Index.
This is a rare shock for the Facebook boss as the last time the company failed to meet targets was the first quarter of 2015. This is a clear indication that the company, despite its 2.23 billion active users, will also face stagnancy at some point.
A report said, Brain Weiser, an analyst at Pivotal Research, suggested that the core Facebook platform is declining and it cannot grow forever.