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More than $ 118 billion was erased from Facebook's market value, including $ 16 billion for founder Mark Zuckerberg's fortune, after the company warned that user growth had slowed as a result of data of Cambridge Analytica Facebook shares collapsed 19.5% on Thursday when the stock market opened in New York, a day after the Silicon Valley company revealed that 3 million users in Europe had abandoned the network social since the Observer revealed the violation of Cambridge Analytica. of 87 million Facebook profiles and the introduction of strict legislation on data protection of the European Union
The fall in the share price of Facebook places the social network on the way to the largest decline in the market value of a company. The shares fell from 19.5% in early trading on Thursday to $ 175 valuing the company to $ 501 billion, a decrease of $ 118 billion from a record $ 619 billion Wednesday. The previous record collapse was when Intel lost $ 91 billion on a day in 2000.
The biggest loser is Mark Zuckerberg, founder and CEO of Facebook, which holds nearly 17% of the company. Zuckerberg's fortune dropped from $ 86.5 billion to $ 70 billion Thursday, sending it from the wealthiest third person on the planet to sixth.
The stock market meltdown comes after the company announced a significant decline in the growth rate, and found that the number of users in Europe rose from 282 million to 279 million.
David Wehner, Facebook's chief financial officer, said Wednesday that the company's decision to "give more choice to data privacy" following the Cambridge Analytica scandal "could have an impact on the growth of our income ". revenue growth rates will continue to slow in the second half of 2018, and we expect our revenue growth rates to decline by high single-digit percentages in both the third and fourth quarters of the year, did he declare. "Beyond 2018, we anticipate that total spending growth will outpace revenue growth in 2019."
He warned investors to expect a sharp increase in costs related to his efforts to improve data processing and an advertising campaign to reassure users.
Last quarter's costs increased by 50% to $ 7.4 billion. The company has spent considerable sums to improve data security and strengthen site monitoring after Zuckerberg admitted that the company was too slow to respond to Russian interference. preparation for the American elections.
"We were too slow to spot and react to Russian interference, and we are working hard to get better," said Zuckerberg during a testimony before the Energy and Energy Committee. Trade House in April. "Our sophistication in managing these threats is growing and improving rapidly."
Zuckerberg was dragged before Congress to answer questions about the data scandal, in which 87 million user profiles were collected before the United States. presidential election. Facebook is also under investigation by the FBI, the US Department of Justice and the Securities and Exchange Commission.
Zuckerberg said Facebook was aiming to hire 20,000 people by the end of the year to strengthen its security and help revise suspicious content. site. The company hires additional corpses at a very high rate, with a 47% increase in its workforce since last year to more than 30,000 people.
"For the future, we will continue to invest heavily in security and privacy because we have a responsibility to protect people," Zuckerberg said last night.
Zuckerberg refused to appear before MPs in the UK despite the threat of a formal summons as a result of the Cambridge Analytica data breach. Earlier this month, the Information Commissioner fined Facebook £ 500,000 for violating the Data Protection Act.
"Facebook has not provided the kind of protections they are required under the Data Protection Act," said Elizabeth Denham, the information commissioner. "Fines and lawsuits punish bad actors, but my real goal is to bring about change and restore confidence in our democratic system."
Facebook 's revenues are such that it would only take him five and a half minutes to make money to pay the fine.
Colin Sebastian, an analyst at Baird, said Facebook's shares had plummeted after the company "dropped two bombs" during a conference call with analysts after it released its results on Wednesday. "A significant slowdown in revenue growth for the third and fourth quarters, followed by a decline in operating margin over the next three years," Baird said. "Importantly, these are" self-inflicted "issues to a large extent because Facebook is sacrificing monetization of core apps to boost the use / engagement of stories.
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