Facebook Chief Executive Officer Mark Zuckerberg’s fortune took an almost $15bn hit on Thursday, as the social media giant headed for the biggest one-day wipe-out in the United States stock market history, a day after executives forecast years of lower profit margins.
At least 16 brokerages cut their price targets on Facebook after Chief Financial Officer, David Wehner, startled an otherwise routine call with analysts by saying the company faced a multi-year squeeze on its business margins, Reuters reported.
That “bombshell”, as one analyst termed it, played into concerns on Wall Street that Facebook’s model could be under threat after a year that has been dominated by efforts to head off concerns over privacy and its role in global news flow.
Shares fell as much as 19.6 per cent to $174.78, a decline that if sustained would wipe about $124bn off the company’s value – or nearly four times the entire market capitalisation of Twitter Inc.
Dismal revenue, which initially pulled the stock down nearly nine per cent on Wednesday, clearly was not the end for wounded investors.