Facebook's shares collapsed by 18% on Thursday when the stock market opened in NY, a day after the Silicon Valley company revealed that 3 million users in Europe have abandoned the social network since the Observer revealed the Cambridge Analytica breach of 87m Facebook profiles and the introduction of strict European Union data protection legislation.
Facebook Inc. faced a day of reckoning as its shares plunged Thursday in the company's worst trading day since going public in 2012. The sharp dip cost Facebook $145 billion in market value.
Some see the Facebook selloff as clear evidence that nothing can grow forever, especially not the world's biggest companies, especially not at the rate of nimble, promising startups. Zuckerberg, 34, is now the world's sixth-richest person with US$70.6 billion, down three rungs on the Bloomberg Billionaires Index.
The drop in European visitors was potentially due to the continuous revelations highlighted there about Facebook's breaches and weaknesses, and the implementation of the European Union and related entities' General Data Protection Regulation (GDPR) in late May. "We run the company for the long term, not just for this quarter", he said.More news: British Open: Nike Athlete Francesco Molinari Wins Italy’s First Major Golf Title
Nathanson also voiced concerns about Facebook's next act, once its namesake social media platform and Instagram are fully built out.
That could be down to the drop being a one-off, potentially following the Cambridge Analytica data sharing scandal, or even the sharing of private posts belonging to some 14 million Facebook users, rather than a downward spiral for Facebook. That goes for fake news, foreign interference in elections, and hate speech, as well as developers and data privacy. "We are taking a broader view of our responsibility and investing to make sure our services are used for good". It was my mistake, and I'm sorry. The Stories format is showing promise, and Facebook still has strong monetization potential across several areas, like IGTV - where it hasn't even really started yet.
In February, the research firm eMarketer estimated that the number of Facebook users under the age of 25 would fall by about 2 million this year.
Facebook shares tumbled by more than 20 per cent on Wednesday after the social media network's revenue and user growth fell short of investor expectations. "We're also making changes to account recovery to reduce the risk of scraping as well". But the slowdown in growth has spooked investors.
The company reported its second-quarter earnings after the bell on Wednesday. The company's user base flatlined in its biggest market, the United States and Canada, at 185 million daily users, while declining 1 per cent in Europe to 279 million daily users.