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Categories: News

Facebook Loses $120 Billion Overnight as Stocks Plunge

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In one fell swoop Thursday morning, Facebook lost more than $120 billion as user growth stalls in the aftermath of data privacy scandals.

The 20 percent nosedive in stock prices came after Facebook announced its first quarterly earnings report since the Cambridge Analytica scandal erupted, The Guardian reported.

CEO Mark Zuckerberg himself lost $16 billion — about a sixth of his net worth — in the first five minutes of morning trading. The company may have to spend just 20 times the typical worker’s salary on private jets and security for Zuckerberg instead of nearly 37 times, or almost $9 million in 2017 as Marketwatch reported.

Facebook said during the earnings call that the company shifted from a period of “hyper-growth” to high growth. It makes most of its ad money off users in the U.S. and Europe but that base has languished.

While the company is starting to earn less, it’s been spending more money to combat election interference, privacy issues, and stop actual #FakeNews. The investments were not necessarily 100 percent voluntary — a whistleblower from data firm Cambridge Analytica came forward earlier this year to reveal that it mined data from 87 million Facebook users to influence voters in the 2016 election.

In response, San Francisco voters in November will decide whether to adopt a first-ever “Privacy First Policy” to bolster the rights of pretty much anyone using technology in the city.

Facebook faced its largest-ever one-day drop in value but it’s nowhere near the beginning of the end for the social media giant. After all, less growth is still growth — and its big money-making abilities matter more to investors than a Federal Trade Commission investigation as it recoups user trust.

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Ida Mojadad

Ida Mojadad is the Staff Writer at SF Weekly. You can reach her at (415)-359-2728 or imojadad@sfweekly.com. Follow her on Twitter at @idamoj.

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Tags: 2016 election cambridge analytica data privacy Facebook trump campaign

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