Facebook has suffered over 119 billion dollars’ worth of market value including a 17 billion dollars damage to the founder Mark Zuckerberg, due to the knowledge made public to the investors that the growth of the site had slowed down since the Cambridge Analytica scandal.
On Thursday, Facebook suffered a 19% drop in its shares one day after the Silicon Valley Company revealing the factual evidence that around 3 million people had abandoned the social platform. This was due to the observer being able to reveal the Cambridge Analytica breach of approximately 87 million Facebook profiles, moreover introduction of the severe European Union data protection legislation.
This day drop marks the biggest ever seen in history.Facebook’s net worth went to $510 billion as its shares went to $176, while just on Wednesday the firm was at a record high reaching almost $630 billion. That is nearly a $119 billion drop. Before this incident the most significant fall Facebook had ever seen in its shares was back in 2000.At the time, the online platform suffered a loss of $91 billion in a day.
The amount of money that has been removed from the net worth of Facebook is equivalent to the whole of McDonald’s. AS the founder and 17% owner of the company, Zuckerberg was the one to suffer the most significant loss.Zuckerberg’s fortune has dropped to $70 billion from $86.5 billion in a day. Moving him back a couple of spots on the list of the wealthiest people on the planet. Him currently being on number six whereas before Zuckerberg was at the number three spot.
On Wednesday David Wehner, Facebook’s chief financial officer stated that;
“The firm’s judgment to give its users more choices around data confidentiality following the Cambridge Analytica scandal may perhaps have an impact on our revenue growth.”
“Facebook’s total revenue growth rates will continue to decelerate in the second half of 2018, and we expect our revenue growth rates to drop by high single-digit percentages from prior quarters successively in both Q3 and Q4, Looking beyond 2018, we antedate that total expense growth will exceed revenue growth in 2019.”
The most recent quarter has seen around a 50% to $7.4 billion increase in costs. That is because that company has spent a vast amount on the improvement of data safety and cumulative policing on sight.
The reasons behind that being in the following statement given to the Congress by Zuckerberg.
“We were too slow to spot and respond to Russian prying, and we’re working hard to improve… Our sophistication in handling these threats is increasing and improving rapidly.” Zuckerberg said.