Facebook's biggest one-day stock wipe-out leaves Mark Zuckerberg $15 bn poorer

Of 47 analysts covering Facebook, 43 still rate the stock as "buy", two rate it "hold" and only two rate it "sell".

 

International News → Facebook Inc Chief Executive Mark Zuckerberg's fortune took a more than $15 billion hit on Thursday, as the social media company suffered the biggest one-day wipeout in US 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.

That "bombshell," as one analyst termed it, played into concerns on Wall Street that Facebook's model could be under threat after a year dominated by efforts to head off concerns over privacy and its role in global news flow.

Shares closed down almost 19 per cent at $176.26, wiping more than $120 billion off the company's value or nearly four times the entire market capitalisation of Twitter Inc .

US Stock Market

Slowing revenue growth initially pulled the stock down nearly 9 in after-hours trading on Wednesday before losses picked up on the margin outlook.

"Over the next several years, we would anticipate that our operating margins will trend towards the mid-30s on a percentage basis," Wehner said on a conference call with analysts.

Facebook's margin fell to 44 per cent in the second quarter from 47 per cent a year ago as it spent heavily on security and initiatives to convince users the company was protecting their privacy.

The company also said revenue growth from emerging markets and the company's Instagram app, which has been less affected by privacy concerns, would not be enough to repair the damage.
The impact on the rest of the FAANG group of high-flying tech stocks was marginal.

Read Full Updates → Facebook Share Drop

---

News Source : BS

It’s Facebook again: 3 million users data was exposed by myPersonality app

The social media giant on Monday said that is auditing each and every app that has access to the data of its users and has already suspended 200 apps which failed to comply with its policies.

International News : A data set of over 3 million Facebook users collected via a personality app was available to download freely for anyone for almost four years, New Scientist reported. The dataset was collected via the personality quiz app “myPersonality” by academics at the University of Cambridge.

“The data was highly sensitive, revealing personal details of Facebook users, such as the results of psychological tests. “It was meant to be stored and shared anonymously, however such poor precautions were taken that deanonymising would not be hard,” the report said.

The data sets were controlled by David Stillwell and Michal Kosinski at the University of Cambridge. “More than 6 million people completed the tests on the myPersonality app and nearly half agreed to share data from their Facebook profiles with the project,” said the report.

Alexandr Kogan, at the centre of the British political consultancy firm Cambridge Analytica scandal, was previously part of the project. “Cambridge Analytica had approached the myPersonality app team in 2013 to get access to the data, but was turned down because of its political ambitions,” the report said.

Also Read: Facebook Suspends 200 Apps Over Data Misuse Investigation

Facebook last month suspended “myPersonality” from its platform, saying the app may have violated its policies. The social media giant said that is auditing each and every app that has access to the data of its users and has already suspended 200 apps which failed to comply with its policies.

The company CEO Mark Zuckerberg had promised a thorough investigation and audit into apps that had access to information before Facebook changed its platform policies in 2014 — significantly reducing the data apps could access.

“To date, thousands of apps have been investigated and around 200 have been suspended — pending a thorough investigation into whether they did in fact misuse any data,” Facebook said.

If Facebook finds evidence that these or other apps did misuse data, it will ban them and notify users via Help Centre on its website. Appearing before the US Congress in April, Zuckerberg told lawmakers that his own personal data was part of 87 million Facebook users that was improperly shared with Cambridge Analytica.

Read More on → Facebook Users Data Leak