Mark Zuckerberg's net worth drops $3.7 billion in after-hours trading
Facebook reported stellar revenue growth in its third quarter earnings call--but warned that it might not last long.
Despite beating revenue expectations for a sixth consecutive quarter, Wall Street is concerned about Facebook's outlook in 2017--ultimately causing CEO Mark Zuckerberg's wealth to drop slightly.
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On Wednesday, Facebook reported a revenue of $7 billion in the third quarter--up 56 percent from the same period a year ago. Yet its stock price went down 7 percent in after-hours trading. According to Forbes, that means Zuckerberg's total wealth, which was estimated to be at $54.4 billion when the markets closed, dropped $3.7 billion (to roughly $50.7 billion) as of 6 p.m. (ET).
STOCK PRICE FOR FB
There are two reasons why the stock price dropped, despite the increase in revenue. Facebook said on the call that it expects expenses to increase next year--thanks to a rise in video sharing, which drives up network costs. The company also expects revenue growth to slow in mid-2017, as it expects growth in ad load to decrease next year. According to CNBC, ad load has been one of the "three main factors" of Facebook's growth, in addition to the number of users and time spent on platform, both of which continue to increase.
However, it's unlikely that Facebook will experience a significant stock drop until revenue growth actually slows. And Zuckerberg, who announced last year that he was giving away 99 percent of his Facebook shares over his lifetime, still has plenty to pass around. He remains No. 5 on Forbes' Billionaires List -- behind Warren Buffett (No. 4) and Carlos Slim (No. 3).
