- Mark Zuckerberg Drops To World's Number 6th Richest As He Looses $17.6bn - G4celeb

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27 Jul 2018

- Mark Zuckerberg Drops To World's Number 6th Richest As He Looses $17.6bn

- Mark Zuckerberg Drops To World's Number 6th Richest As He Looses $17.6bn
On Wednesday, Facebook stock plunged over 20 percent, following a disappointing earnings reports which made CEO Mark Zuckerberg lose $17.6bn in net worth.

The 34-year-old Facebook billionaire, who had been worth as much as $86.5bn when Facebook stock traded at an all-time high earlier in the day, now has a net worth of about $68.9bn, based on regulatory filings with the U.S. Securities and Exchange Commission.

That figure includes some $2.7bn in cash and real estate, according to Bloomberg’s Billionaire index.

That places Zuckerberg, who had been the world’s third-richest person, at Number Six, below billionaires including Berkshire Hathaway’s Warren Buffett, French business magnate Bernard Arnault, and Zara founder Amancio Ortega.

Zuckerberg’s net worth had surpassed Buffett’s in June as shares of Facebook continued to climb and Buffett continued to give much of his wealth away in charitable donations. Today, Buffett is worth roughly about $82.3bn.

Facebook’s founder is the media company’s largest shareholder, with 12.8 percent of its shares outstanding.

Zuckerberg’s paper losses come after Facebook revealed mixed earnings and slowing growth during the second quarter of 2018.

During the quarter, the company added 22 million daily active users, lower than the 41 million it added in the same quarter a year earlier.

Chief financial officer, David Wehner, told analysts in a follow-up call to brace for a possibly deeper slowdown as the company seeks to expand new offerings such as Stories and increase privacy and security for users.

At least 16 brokerages cut their price targets on Facebook after executives said the cost of improving privacy safeguards, as well as slowing usage in the biggest advertising markets, would hit the company’s profit margins for more than two years.

Facebook shares were down 20.4 percent at $173.20 in pre-market trading, a decline that would wipe about $128bn off the company’s value — or nearly four times the entire market capitalisation of Twitter Inc.

Facebook’s second-quarter results were the first sign that a new European privacy law and a string of privacy scandals involving Cambridge Analytica and other app developers are hitting the company’s business.

Facebook also warned that the toll would not be offset by revenue growth from emerging markets and the company’s Instagram app, which has been less affected by privacy concerns.

Describing the announcements as “bombshells,” Baird analysts said the issues were, to a large degree, “self-inflicted” as Facebook sacrifices its core app monetisation to drive usage.

Of 47 analysts covering Facebook, 43 rate the stock as “buy,” two rate it “hold,” and two rate it “sell.” Their median target price is $219.30.

Some analysts said Facebook’s issues would not be easily resolved.

“Unlike Netflix, whose quarterly shortfall we saw as temporary, here we see an evolution of the story, albeit a portion of which we expected,” said Daniel Salmon, analyst at BMO Capital Markets.

Others, however, saw a silver lining in Facebook’s emphasis on more engaging content and its promotion of stories on its News Feed, which would support revenue over the longer term.

“Bears win this quarter … but not the war,” said Brent Thill, an analyst with Jefferies.

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