Mark Zuckerberg, the founder and CEO of the most popular social networking platform Facebook lost $15.1 billion in just 5 minutes! For most of the world’s richest people, losing $15.1 billion in five minutes would be a wipeout. However, for Mark Zuckerberg, it’s just about a sixth of his net worth.
The Facebook CEO lost a considerable amount of wealth as shares of the social-media giant plunged 19 per cent on Thursday. This loss recorded the biggest one-day wipeout of individual wealth ever recorded on the ranking, which started tracking the world’s biggest fortunes in 2012.
Other big Facebook investors also took a hit as disappointing second-quarter results terminated $119 billion of market value, the most ever in a day for a U.S. company. Co-founders Dustin Moskovitz and Eduardo Saverin lost $3.9 billion and $2.2 billion, respectively, while Chief Operating Officer Sheryl Sandberg lost $100 million.
A number of analysts said a few things after these results:
UBS, Eric Sheridan
Sheridan cut his rating to neutral from buy and lowered his price target on Facebook to $180 from $212. He writes that “new growth drivers (Instagram, Watch, Stories, Messenger/WhatsApp, VR) frankly aren’t big enough over the short/medium term to alter the decelerating growth & margin pressure profile of the P&L.”
He sees the risk/reward for Facebook as balanced with “strong momentum in Instagram measured against regulatory attention, investments to transform/protect the ecosystem, & slowing engagement/more mature ad trends at core FB.”
Raymond James, Aaron Kessler
Kessler cut his rating on Facebook to outperform from strong buy and lowered his price target to $210 from $240 based on “increased near-term uncertainty on revenue growth, slowing user growth, and lower margin forecast.”
Nomura, Mark Kelley
Kelley cut his rating to neutral from buy and lowered his price target to $183 from $228. The deficit in the quarter was “spread across metrics and geographies and was more than just a side effect of GDPR.” Kelley noted that consolidated net adds haven’t been this light since the third quarter of 2014.
“It’s possible (and likely, in our view) that management is being overly conservative on the margin side as it looks to invest in security and product simultaneously,” Kelley said it may be a valuable amount of time before WhatsApp monetization comes into focus.
JPMorgan, Doug Anmuth
JPMorgan eliminated Facebook from its analyst focus list and cut its price target to $205 from $242. Anmuth said the shift in Facebook user behaviour from Feed to Stories could create near-term monetization headwinds.
While part of the revenue impact in the second quarter was due to currency headwinds, Anmuth said Facebook “felt data and privacy issues more in Europe with some early impact from GDPR in both users and monetization.” He also stated that it appears that advertisers are also being more cautious around targeting customers.