Facebook sets record for single-day money loss
now to the worst day of trading for one of the world’s biggest companies Facebook set a record for the most money lost in a single day on Wall Street a huge chunk 19% of its market value disappeared we’re talking more than 100 billion dollars weigh more than the GDP of some small countries was bringing our business reporter Jaclyn Jansen has been looking into why let’s begin with what happened today we saw this drop because up until today Facebook’s growth seemed practically Unstoppable but we did see that that seems to be not the case anymore in the company’s conference call yesterday Mark Zuckerberg was pretty Frank about the company’s weeks we’re investing so much in security that it will significantly impact our profitability we’re starting to see that this quarter Facebook says it can’t keep up its rapid growth while it spends more money on privacy and security continue to invest heavily in security and privacy because we have a responsibility to keep people safe and it’s being forced to my new rules in the European Union to protect consumer privacy that’s already slowing advertising growth there what was Facebook’s plan to shift ads from news feeds two stories a newer feature of photos and videos that last just 24 hours that made some analyst skeptical why model model was failing with respect to security and that means that they aren’t being proactive actually are being reactive and they don’t necessarily have a plan they don’t know if it’s going to work in this expert points to one possible reason there’s an entire younger generation younger demographic that’s not using the platform lingering privacy concerns and the spread of fake news all likely testing users trust but will they leave because it is so big I don’t think it’s going to be any kind of immediate drop off that we see but could just be the beginning of a slow decline for the platform I think that there’s no doubt that that’s the case so what we saw today was investors reacting to some pretty big concerns the cost of privacy rules in the EU it’s slowing user and revenue growth and a warning that profit will likely be squeezed for quarters if not years to come but despite all that you and this is as you said still one of the most valuable tech companies in the world but what it lost today along with that drop and its market value was investors many investors confidence in the company and the numbers are so big they’re kind of hard to grasp thank you very much in your stalling user growth in the United States and Canada is far bigger problem let’s show you what we mean Facebook makes an average of nearly $6 of Revenue per person that is globally now you break it down by region the average value of a European user was close to $9 but American or Canadian user will almost $26 the big difference is that advertisers were almost all of Facebook’s Revenue comes from these users in the United States and Canada as more Absalom so that’s what you’re Worth to Facebook what about what Facebook is worth to Mark Zuckerberg well today’s stock drop hit his personal stake to his net worth lost close to 16 billion dollars but you still doing pretty well he’s worth about 67 billion dollars 2 ForksFacebook now holds the dubious record for a single-day money loss, after its market value dropped 19 per cent. The company lost more than $100 billion US, more than the GDP of some small countries.
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