Following months of scandal and criticism, Facebook CEO Mark Zuckerberg lost $16.8 billion this week after Facebook stock plummeted 20 percent after market close on Wednesday, Business Insider reported.
The freefall came after a disappointing earnings report for Facebook’s second financial quarter which was below analysts’ expectations.
“At the current after hours prices and given its market cap at the close Wednesday, Facebook is poised to lose more than $123 billion in market value,” CNBC reported.
The huge decline was one of the largest after-market drops ever and the greatest stock drop in the company’s history, according to the Financial Times.
Zuckerberg’s billion-dollar losses negate his $13.7 billion gains for this year and knock his net wealth from $86.5 billion to $68.9 billion, Bloomberg reported.
It will also slide him from third place to sixth place on the Bloomberg Billionaires Index if the 20 percent drop holds through Thursday’s close.
According to Facebook’s Chief Financial Officer David Wehner, the numbers likely won’t improve this year and revenue growth rates will decline in the third and fourth quarters.
“Analysts who follow Facebook were blindsided, asking frequently on a conference call with executives for more information on exactly how the company’s financial future had changed so dramatically,” Bloomberg reported.
“I think many investors are having a hard time reconciling that deceleration,” Brent Thill, an analyst at Jefferies LLC, told Facebook executives. “It just seems like the magnitude is beyond anything we’ve seen, especially across a number of the tech (companies) we cover.”
Facebook has come under tough scrutiny in recent months, culminating with Zuckerberg testifying before Congress on the company’s handling of user information, as well as Facebook’s suspected political bias.
The company is also being hit in Europe with the European Union’s implementation of strict new privacy laws.
“In the U.S. and Canada, Facebook’s daily active users remained flat sequentially at 185 million, while the number actually fell in Europe, falling to 279 million, down from 282 million,” Fox News reported.
Zuckerberg also recently faced harsh criticism from the parents of a Sandy Hook shooting victim for Facebook’s handling of hoax claims on the platform.
Facebook’s investors are now working on a plan to oust Zuckerberg as the company’s chairman because of his “mishandling” of these numerous company controversies, Fortune reported.
Shareholder Trillium Asset Management — which holds an $11 million stake in Facebook — is leading the way on the proposal to oust Zuckerberg.
Trillium wants an independent chair to take Zuckerberg’s place and has been pushing for the company to split the chairman and CEO roles.
According to Business Insider, this plan will likely be unsuccessful because of Zuckerberg’s voting power counts for more than half of the total influence.
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