Facebook’s Stock Just Took a Massive Hit, Wiping Off As Much As $145 Billion in Market Cap

Facebook’s problems have reached a boiling point. After months of questions and, often reluctant, disclosures about massive information leaks and about how it handles false information on its site seen by hundreds of millions of people, disappointing user growth caused the social network’s stock to plummet in after-hours trading on Wednesday, shedding over $ 145 billion in market cap.

Investors’ alarm was likely triggered by a failure in growth in its most important markets, the combined U.S. and Canada segment and Europe. U.S. and Canadian traffic was flat from the previous quarter, while Europe shed 3 million average daily users quarter over quarter, down to 279 million.

U.S. and Canadian Facebook visitors provided an average revenue per user (ARPU) in the latest quarter of $ 25.91, the vast majority from advertising, while the ARPU of Europeans was $ 8.76, according to figures provided by Facebook. Other markets offer much less value: Asia-Pacific users rack up just $ 2.61 in revenue, and the rest of the world lumped together, a mere $ 1.91.

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. The GDPR requires more disclosure and opting in to many tracking and ad-related behaviors that aren’t related to the core function of a website.

While the company saw revenue up 42% year-over-year to $ 13.2 billion in its second quarter, that was short of what Wall Street expected. Net income was similarly up, to $ 5.1 billion from $ 3.9 billion the year-ago quarter, but that didn’t assuage investors and institutions. The after-hours plunge came despite Facebook also beating a consensus estimate of earnings per share of $ 1.72 by two cents.

This slowing growth in valuable markets may have provided the jitters that led investors to significant after-hours profit taking. The company had a nearly unbroken steady climb in its stock price since mid-2014, with a blip shedding 15% in a matter of days in March when revelations about alleged data misuse by Cambridge Analytica emerged. Facebook stock recovered gradually, and was up 29% in the last year and 21% in 2018 through the close of regular trading today, rising to a new high of 217.50, before the after-hours tumble. Nearly the last year’s gains have now been lost.

Facebook has no end in sight for scrutiny and oversight, with regulators, prosecutors, and other public and private parties in multiple countries examining the company’s actions, those of nation states allegedly manipulating news and advertising, and that of firms like Cambridge Analytica, which obtained massive amounts of information that many Facebook users likely considered private.

Yesterday, BuzzFeed published a memo by chief security officer Alex Stamos written to staff in March after the initial Cambridge Analytica stories broke in which he urged the company to pick sides on important issues. Stamos reportedly still plans to leave the company next month, following a reorganization that the New York Times said earlier this year took away 98% of the group he managed. Today, Facebook’s chief legal officer announced he’s departing at the end of this year for family reasons.

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Parents Get More Control Over Facebook’s Messenger Kids With New Sleep Mode

Facebook’s recently introduced Messenger Kids app is getting an upgrade that lets parents set “off times” that blocks their children from using the service.

The new Sleep Mode, which debuted on Friday, also lets parents set different times for the app to shut off depending on the day of the week. During “off times,” the app is inaccessible, meaning children will be unable to send or receive messages or video calls, use the creative camera to take or send photos or receive notifications.

All Sleep Mode settings are controlled from the parent’s Facebook account and can be changed at any time.

Messenger Kids, which is aimed at children from 6 to 12, launched in December. While some parents have said that they appreciate having control over their children’s social media access, it’s still been met with controversy. Facebook itself recently faced a number of questions from Congress over how user data it collects is handled, especially when those users are minors.

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Mark Zuckerberg Has Lost This Much Money for Changing Facebook’s Feed

Facebook stock took a hit after the social network announced massive changes to its news feed. And no one felt that hit more than Mark Zuckerberg.

The founder and CEO of Facebook owns over 400 million shares of the company, meaning stock fluctuations hit him the hardest. The trick is figuring out exactly how hard — and that’s where things get a little difficult.

As of April 14, 2017, the company’s last proxy statement, Zuckerberg owned over 2.6 million shares of Class A stock and nearly 411 million Class B shares. In September, though, he announced plans to sell as many as 75 million shares over the following 18 months “to fund the philanthropic initiatives of [he] and his wife, Priscilla Chan,” according to a filing.

So, for argument’s sake, let’s say he’s halfway through that sales goal (unlikely, but it doesn’t hurt to be conservative) — bringing his total holdings to approximately 377 million shares.

Given the company’s 4.5% drop on Friday, that would mean Zuckerberg lost more than $ 3.1 billion, on paper at least. (If he hasn’t sold any of the 75 million shares he’s planning to, the loss escalates to nearly $ 3.5 billion.)

Of course, Facebook shares will almost certainly rebound. And analysts say they expect the changes will drive higher ad prices and could result in more money for Facebook, something that always cheers investors.

Ultimately, though, Zuckerberg’s likely not concerned. He’s already pledged to give away 99% of his net worth in his lifetime.

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