Mark Zuckerberg Lost Approximately $150 billion in just 2 hours

Mark Zuckerberg Lost Approximately $150 billion in just 2 hours

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Mark Zuckerberg Lost Approximately $150 billion in just 2 hours

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Facebook chief executive Mark Zuckerberg said the tech giant has been investing heavily in “safety, security and privacy” after being rocked by concerns of manipulation.

There’s a scratch in Facebook’s Teflon coating as the social networking company loses approximately US$150 billion ($219b) in market capitalisation in under two hours, Reuters has reported. Profit was up 31 percent in the second quarter at $5.1 billion; revenues rose 42 percent to $13.2 billion, slightly below most forecasts.

Selling pressure accelerated when chief financial officer David Wehner warned in a call with analysts of a weaker outlook in the coming quarter. Wehner said revenue growth “decelerated” in the second quarter and will decline “by high single digit percentages” and added that “we are also giving people who use our services more choices around data privacy which may have an impact on our revenue growth”.

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On the call, Jefferies & Co. analyst Brent Thill said that “many investors are having a hard time reconciling that deceleration… It just seems like the magnitude is beyond anything we’ve seen.” Ross Gerber, an analyst at Gerber Kawasaki, said the latest figures suggest that the tide may be turning for Facebook and other social networks.”Social Media has peaked,” Gerber said on Twitter. “We told you last qtr and now we’re seeing it.”

“Despite facing important challenges, our community and business are off to a strong start in 2018,” said Mark Zuckerberg. “We are taking a broader view of our responsibility and investing to make sure our services are used for good. But we also need to keep building new tools to help people connect, strengthen our communities, and bring the world closer together.”

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The update showed the key metric of monthly active users rose 11 percent to 2.23 billion, below most estimates of 2.25 billion, while daily active users grew a weaker-than-expected 11 percent to 1.47 billion.

According to the research firm, Facebook-owned Instagram is making up for some of the slowdown in growth at the social network and will generate $8.06 billion in worldwide ad revenue this year. Separately Wednesday, Facebook general counsel Colin Stretch, who advised the company through a series of probes and investigations into data privacy, said he would be leaving for personal reasons.

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“There is never a ‘right time’ for a transition like this, but the team and the company boast incredible talent and will navigate this well,” Stretch said on his Facebook page.

Facebook’s shares had gained more than 10 per cent over the last month and closed higher at US$217.50 on Wednesday, before the company reported earnings.

 

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