Zuckerberg down $16bn as market 'unlikes' Facebook

"The bundling of consent for Facebook to use consumer data with access to the platform appears to be an aggressive interpretation of GDPR, and one that might be more subject to eventual regulatory action", Wieser said.

On Thursday afternoon, Facebook watched its capitalization drop by $119 billion, lowering its valuation to $510 billion, which represents a 19 percent drop, according to CNBC. While the 42% growth percentage sounds high, when compared against the first quarter of 2018, Facebook's revenues grew by only 11% over the first quarter.

That "bombshell", as one analyst termed it, played into concerns on Wall Street that Facebook's model could be under threat after a year dominated by efforts to head off concerns over privacy and its role in global news flow.

The drop translates to a US$119.4 billion (NZ$176b) decline in Facebook's market capitalisation, the largest-ever daily fall in value of a U.S. traded company.

Revenue in the second quarter totaled $13.23 billion, shy of the $13.33 billion analysts expected, raising worries that the political and social backlash against the company is affecting its bottom line.

Facebook also said it expects slower user growth, partly due to the effect of the data privacy scandals.

Facebook Inc.'s scandals are finally hitting the company where it hurts the most, its growth.

Facebook stock plummeted almost 20 percent Thursday in the largest one-day loss in history for any publicly traded company. "We're starting to see that this quarter", he said.

The company is likely to post subpar operating margins for "several years," he said - "more than two, less than many".

Some analysts, however, believe it's more than that. Some reasons included Facebook investing in Stories, which has lower levels of monetization, as well as improving privacy features as a result of GDPR and other user demands.

Shares plunged as much as 24% after Chief Financial Officer David Wehner said revenue growth rates would decline in the third and fourth quarters. The decline in Facebook's market value was roughly equivalent to the entire value of some of the country's best-known companies, including McDonald's, Nike and industrial conglomerate 3M.

It continues, "In approving this annual security allowance, the Committee considered Mr. Zuckerberg's position and importance to Facebook and the fact that Mr. Zuckerberg has requested to receive only $1 in annual salary and does not receive any bonus payments or equity awards ..." Mobile now makes up 91% of the company's advertising revenue. 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.

  • Eleanor Harrison