Facebook loses over $120 billion in market cap after privacy scandal hits revenue, user growth

Facebook's market value tanked as the company's shares went into a free fall amid the ongoing investigations regarding its data privacy scandal on Wednesday. The company 's shares fell by over 20 percent as it announced its slowest ever growth rate which in turn raised concerns that its growth in terms of revenue is likely to decelerate.

Facebook's share price on Wednesday touched new highs at it rose to $217.50 before closing. However, the company's success in the share market was short lived as the value then dropped to $172 after the earnings call-- registering a market cap drop of roughly $123 billion. Menlo Park lost more value than most startups in two just hours, Tech Crunch reported.

"Our community and business continue to grow quickly. We are committed to investing to keep people safe and secure, and to keep building meaningful new ways to help people connect," Facebook CEO Mark Zuckerberg said announcing the company's second quarter earnings.

p>"Our community and business continue to grow quickly. We are committed to investing to keep people safe and secure, and to keep building meaningful new ways to help people connect," Facebook CEO Mark Zuckerberg said announcing the company's second quarter earnings.

Facebook registered daily active users (DAUs) of 1.47 billion for the month of June this year which was an increase of 11 per cent year-over-year- marking slow growth rate in the second quarter



of the year. The company charted a similar trend in terms of its monthly active users (MAUs) registering 2.23 billion users and an increase of 11 per cent year-over-year as of June 30, 2018. For reference, the company charted an increase of 17 per cent in terms of DAUs and MAUs during the same time last year.

While Facebook did try to distract the users by saying that 2.5 billion people were using its family of apps which includes Instagram and WhatsApp, the sudden drop in its growth rate is too hard to miss and it projects a worrisome trend.

Incidentally, Facebook's numbers witnessed a marked decline even in important markets like the United States, Canada and the European Union, where the company took a direct hit in terms of DAU due to the implementation of the General Data Protection Regulation (GDPR). "GDPR has not had a significant (ad) revenue impact, but we also recognize it wasn't fully rolled out this quarter," Facebook Chief Operating Officer Sheryl Sandberg said reacting to the statement, CNBC reported.

The company's MAU shrank from 377 million to 376 million in Europe where it earned $8.76 per user. Similarly, DAUs in the US and in Canada paused at 241 million where it earned $25.91 per user despite the investigation.

Meanwhile, the company Chief Financial Officer David Weher has warned that Facebook's metrics would decelerate by single digits in the coming two quarters of the year.