CEO Mark Zuckerberg loses $16 billion in record Facebook fall

July 26 (Reuters) - Facebook Inc Chief Executive Officer Mark Zuckerberg's fortune took an almost $16 billion hit on Thursday, as the social media giant headed for the biggest one-day wipeout in U.S. stock market history, a day after executives forecast years of lower profit margins.

At least 16 brokerages cut their price targets on Facebook after managers said the cost of improving privacy safeguards, as well as slowing usage in the biggest advertising markets, would hit the company's profit margins for more than two years.

Facebook shares were down as much as 19.6 percent at $174.78 in early trading, a decline that would wipe about $124 billion off the company's value - or nearly four times the entire market capitalization of Twitter Inc.

Facebook's second-quarter results were the first sign that a new European privacy law and a string of privacy scandals involving Cambridge Analytica and other app developers are hitting the company's business.

RELATED: Facebook CEO Mark Zuckerberg testifies before Congress

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Facebook CEO Mark Zuckerberg testifies before Congress
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Facebook CEO Mark Zuckerberg testifies before Congress
WASHINGTON, DC - APRIL 10: Facebook co-founder, Chairman and CEO Mark Zuckerberg arrives to testify before a combined Senate Judiciary and Commerce committee hearing in the Hart Senate Office Building on Capitol Hill April 10, 2018 in Washington, DC. Zuckerberg, 33, was called to testify after it was reported that 87 million Facebook users had their personal information harvested by Cambridge Analytica, a British political consulting firm linked to the Trump campaign. (Photo by Chip Somodevilla/Getty Images)
Facebook CEO Mark Zuckerberg arrives to testify before a House Energy and Commerce Committee hearing regarding the company?s use and protection of user data on Capitol Hill in Washington, U.S., April 11, 2018. REUTERS/Leah Millis
Facebook CEO Mark Zuckerberg arrives to testify before a House Energy and Commerce Committee hearing regarding the company?s use and protection of user data on Capitol Hill in Washington, U.S., April 11, 2018. REUTERS/Leah Millis
Facebook CEO Mark Zuckerberg testifies before a House Energy and Commerce Committee hearing regarding the company?s use and protection of user data on Capitol Hill in Washington, U.S., April 11, 2018. REUTERS/Leah Millis
Facebook CEO Mark Zuckerberg arrives to testify before a joint hearing of the US Senate Commerce, Science and Transportation Committee and Senate Judiciary Committee on Capitol Hill, April 10, 2018 in Washington, DC. / AFP PHOTO / JIM WATSON (Photo credit should read JIM WATSON/AFP/Getty Images)
Mark Zuckerberg, chief executive officer and founder of Facebook Inc., waits to begin a joint hearing of the Senate Judiciary and Commerce Committees in Washington, D.C., U.S., on Tuesday, April 10, 2018. Lawmakers will grill Zuckerberg on issues ranging from the troves of data vacuumed up by app developers and political consultant Cambridge Analytica to Russian operatives' use of the social network to spread misinformation and discord during the 2016 U.S. presidential election. Photographer: Andrew Harrer/Bloomberg via Getty Images
Facebook founder and CEO Mark Zuckerberg arrives to testify during a Senate Commerce, Science and Transportation Committee and Senate Judiciary Committee joint hearing about Facebook on Capitol Hill in Washington, DC, April 10, 2018. / AFP PHOTO / SAUL LOEB (Photo credit should read SAUL LOEB/AFP/Getty Images)
Facebook founder and CEO Mark Zuckerberg arrives to testify during a Senate Commerce, Science and Transportation Committee and Senate Judiciary Committee joint hearing about Facebook on Capitol Hill in Washington, DC, April 10, 2018. / AFP PHOTO / SAUL LOEB (Photo credit should read SAUL LOEB/AFP/Getty Images)
Facebook CEO Mark Zuckerberg arrives to testify before a Senate Judiciary and Commerce Committees joint hearing regarding the company?s use and protection of user data, on Capitol Hill in Washington, U.S., April 10, 2018. REUTERS/Leah Millis
Facebook CEO Mark Zuckerberg arrives to testify before a Senate Judiciary and Commerce Committees joint hearing regarding the company?s use and protection of user data on Capitol Hill in Washington, U.S., April 10, 2018. REUTERS/Aaron P. Bernstein
Facebook CEO Mark Zuckerberg arrives to testify before a Senate Judiciary and Commerce Committees joint hearing regarding the company?s use and protection of user data, on Capitol Hill in Washington, U.S., April 10, 2018. REUTERS/Aaron P. Bernstein
The witness table is seen before Facebook CEO Mark Zuckerberg appearance at a joint hearing of the Senate Commerce, Science and Transportation Committee and Senate Judiciary Committee on Capitol Hill, April 10, 2018 in Washington, DC. / AFP PHOTO / Brendan Smialowski (Photo credit should read BRENDAN SMIALOWSKI/AFP/Getty Images)
Facebook CEO Mark Zuckerberg arrives to testify before a joint hearing of the US Senate Commerce, Science and Transportation Committee and Senate Judiciary Committee on Capitol Hill, April 10, 2018 in Washington, DC. / AFP PHOTO / JIM WATSON (Photo credit should read JIM WATSON/AFP/Getty Images)
Facebook CEO Mark Zuckerberg arrives to testify before a joint hearing of the US Senate Commerce, Science and Transportation Committee and Senate Judiciary Committee on Capitol Hill, April 10, 2018 in Washington, DC. / AFP PHOTO / JIM WATSON (Photo credit should read JIM WATSON/AFP/Getty Images)
Facebook CEO Mark Zuckerberg arrives to testify before a joint hearing of the US Senate Commerce, Science and Transportation Committee and Senate Judiciary Committee on Capitol Hill, April 10, 2018 in Washington, DC. / AFP PHOTO / JIM WATSON (Photo credit should read JIM WATSON/AFP/Getty Images)
Facebook founder and CEO Mark Zuckerberg arrives to testify during a Senate Commerce, Science and Transportation Committee and Senate Judiciary Committee joint hearing about Facebook on Capitol Hill in Washington, DC, April 10, 2018. / AFP PHOTO / SAUL LOEB (Photo credit should read SAUL LOEB/AFP/Getty Images)
WASHINGTON, DC - APRIL 10: Facebook co-founder, Chairman and CEO Mark Zuckerberg arrives to testify before a combined Senate Judiciary and Commerce committee hearing in the Hart Senate Office Building on Capitol Hill April 10, 2018 in Washington, DC. Zuckerberg, 33, was called to testify after it was reported that 87 million Facebook users had their personal information harvested by Cambridge Analytica, a British political consulting firm linked to the Trump campaign. (Photo by Chip Somodevilla/Getty Images)
Facebook CEO Mark Zuckerberg listens while testifying before a joint Senate Judiciary and Commerce Committees hearing regarding the company?s use and protection of user data, on Capitol Hill in Washington, U.S., April 10, 2018. REUTERS/Leah Millis
Facebook CEO Mark Zuckerberg takes a drink while testifying before a Senate Judiciary and Commerce Committees joint hearing regarding the company?s use and protection of user data on Capitol Hill in Washington, U.S., April 10, 2018. REUTERS/Alex Brandon/Pool
Facebook CEO Mark Zuckerberg takes a drink while testifying before a Senate Judiciary and Commerce Committees joint hearing regarding the company?s use and protection of user data on Capitol Hill in Washington, U.S., April 10, 2018. REUTERS/Alex Brandon/Pool
Facebook CEO Mark Zuckerberg testifies before a joint Senate Judiciary and Commerce Committees hearing regarding the company?s use and protection of user data, on Capitol Hill in Washington, U.S., April 10, 2018.
Facebook CEO Mark Zuckerberg testifies before a Senate Judiciary and Commerce Committees joint hearing regarding the company?s use and protection of user data on Capitol Hill in Washington, U.S., April 10, 2018. REUTERS/Aaron P. Bernstein
Facebook CEO Mark Zuckerberg sits down following a break to resume testifying before a joint Senate Judiciary and Commerce Committees hearing regarding the company?s use and protection of user data, on Capitol Hill in Washington, U.S., April 10, 2018. REUTERS/Leah Millis
Facebook CEO Mark Zuckerberg sits down following a break to resume testifying before a joint Senate Judiciary and Commerce Committees hearing regarding the company?s use and protection of user data, on Capitol Hill in Washington, U.S., April 10, 2018. REUTERS/Leah Millis
Senator John Kennedy (R-LA) listens as Facebook CEO Mark Zuckerberg testifies before a joint Senate Judiciary and Commerce Committees hearing regarding the company?s use and protection of user data, on Capitol Hill in Washington, U.S., April 10, 2018. REUTERS/Leah Millis
Sen. Shelley Moore Capito (R-WV) listens as Facebook CEO Mark Zuckerberg testifies before a joint Senate Judiciary and Commerce Committees hearing regarding the company?s use and protection of user data, on Capitol Hill in Washington, U.S., April 10, 2018. REUTERS/Leah Millis
Senator John Kennedy (R-LA) (L) looks on as Senator Lindsey Graham (R-SC) holds up the privacy agreement of Facebook as its CEO Mark Zuckerberg testifies before a joint Senate Judiciary and Commerce Committees hearing regarding the company?s use and protection of user data, on Capitol Hill in Washington, U.S., April 10, 2018. REUTERS/Leah Millis
Facebook CEO Mark Zuckerberg responds to a question about his own personal information becoming public as he testifies before a joint Senate Judiciary and Commerce Committees hearing regarding the company?s use and protection of user data, on Capitol Hill in Washington, U.S., April 10, 2018. REUTERS/Leah Millis
Facebook CEO Mark Zuckerberg testifies before a joint Senate Judiciary and Commerce Committees hearing regarding the company?s use and protection of user data, on Capitol Hill in Washington, U.S., April 10, 2018. REUTERS/Aaron P. Bernstein
Facebook CEO Mark Zuckerberg is surrounded by members of the media as he arrives to testify before a Senate Judiciary and Commerce Committees joint hearing regarding the company?s use and protection of user data, on Capitol Hill in Washington, U.S., April 10, 2018. REUTERS/Leah Millis TPX IMAGES OF THE DAY
WASHINGTON, DC - APRIL 09: Facebook CEO Mark Zuckerberg (2 L) arrives at a meeting with U.S. Sen. Bill Nelson (D-FL), ranking member of the Senate Committee on Commerce, Science, and Transportation, April 9, 2018 on Capitol Hill in Washington, DC. Zuckerberg is scheduled to testify before a few Congressional committees this week on the mass users data Facebook has shared with political operatives. (Photo by Alex Wong/Getty Images)
UNITED STATES - APRIL 9: Facebook CEO Mark Zuckerberg arrives for his meeting with Sen. Bill Nelson, D-Fla., in the Hart Senate Office Building on Monday, April 9, 2018. Zuckerberg is on Capitol Hill to testify before the House and Senate this week. (Photo By Bill Clark/CQ Roll Call)
Mark Zuckerberg and Andrea Besmehn, Mark Zuckerbergs executive assistant at Facebook depart US Senator Bill Nelson's, D-Florida, office on Capitol Hill in Washington, DC, on April 9, 2018. Embattled Facebook chief Mark Zuckerberg has placed the blame for security lapses at the world's largest social network squarely on himself as he girded Monday for appearances this week before angry lawmakers.In prepared remarks released by a congressional panel, Zuckerberg admitted he was too idealistic and failed to grasp how the platform -- used by two billion people -- could be abused and manipulated. / AFP PHOTO / JIM WATSON / The erroneous mention[s] appearing in the metadata of this photo by JIM WATSON has been modified in AFP systems in the following manner: [Andrea Besmehn (R), Mark Zuckerbergs executive assistant at Facebook] instead of [Priscilla Chan]. Please immediately remove the erroneous mention[s] from all your online services and delete it (them) from your servers. If you have been authorized by AFP to distribute it (them) to third parties, please ensure that the same actions are carried out by them. Failure to promptly comply with these instructions will entail liability on your part for any continued or post notification usage. Therefore we thank you very much for all your attention and prompt action. We are sorry for the inconvenience this notification may cause and remain at your disposal for any further information you may require. (Photo credit should read JIM WATSON/AFP/Getty Images)
WASHINGTON, DC - APRIL 09: Facebook CEO Mark Zuckerberg (C) leaves after a meeting with U.S. Sen. Bill Nelson (D-FL), ranking member of the Senate Committee on Commerce, Science, and Transportation, April 9, 2018 on Capitol Hill in Washington, DC. Zuckerberg is scheduled to testify before a few Congressional committees this week on the mass users data Facebook has shared with political operatives. (Photo by Alex Wong/Getty Images)
WASHINGTON, DC - APRIL 09: Facebook CEO Mark Zuckerberg (3rd L) leaves after a meeting with U.S. Sen. Bill Nelson (D-FL), ranking member of the Senate Committee on Commerce, Science, and Transportation, April 9, 2018 on Capitol Hill in Washington, DC. Zuckerberg is scheduled to testify before a few Congressional committees this week on the mass users data Facebook has shared with political operatives. (Photo by Alex Wong/Getty Images)
Mark Zuckerberg, chief executive officer and founder of Facebook Inc., exits after a meeting with Senator Dianne Feinstein, a Democrat from California, not pictured, on Capitol Hill in Washington, D.C., U.S., on Monday, April 9, 2018. Zuckerberg, in prepared testimony for the U.S. House of Representatives, said all of Facebook's problems are his mistake. Photographer: Yuri Gripas/Bloomberg via Getty Images
WASHINGTON, DC - APRIL 09: Facebook CEO Mark Zuckerberg (C) leaves the office of Sen. Dianne Feinstein (D-CA) after meeting with Feinstein on Capitol Hill on April 9, 2018 in Washington, DC. Zuckerberg is meeting with individual senators in advance of tomorrow's scheduled hearing before the Senate Judiciary and Commerce committeees. Zuckerberg is under pressure to explain why tens of millions of Facebook user's private information was shared with Cambridge Analytica. (Photo by Win McNamee/Getty Images)
WASHINGTON, DC - APRIL 09: Facebook CEO Mark Zuckerberg (C) leaves the office of Sen. Dianne Feinstein (D-CA) after meeting with Feinstein on Capitol Hill on April 9, 2018 in Washington, DC. Zuckerberg is meeting with individual senators in advance of tomorrow's scheduled hearing before the Senate Judiciary and Commerce committeees. (Photo by Win McNamee/Getty Images)
WASHINGTON, DC - APRIL 09: Facebook CEO Mark Zuckerberg (3rd L) leaves after a meeting with U.S. Sen. Bill Nelson (D-FL), ranking member of the Senate Committee on Commerce, Science, and Transportation, April 9, 2018 on Capitol Hill in Washington, DC. Zuckerberg is scheduled to testify before a few Congressional committees this week on the mass users data Facebook has shared with political operatives. (Photo by Alex Wong/Getty Images)
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Facebook also warned that the toll would not be offset by revenue growth from emerging markets and the company's Instagram app, which has been less affected by privacy concerns.

Describing the announcements as "bombshells," Baird analysts said the issues were to a large degree "self-inflicted" as Facebook sacrifices its core app monetization to drive usage.

Of 47 analysts covering Facebook, 43 rate the stock as "buy," two rate it "hold" and two rate it "sell." Their median target price is $219.30.

MoffettNathanson analysts called the company's forecast "either the new economic reality of their business model or a very public act of self-immolation to stave off further regulatory pressure."

The $15.8 billion in net worth that Zuckerberg stands to lose in the move is equal to the wealth of the world's 81st-richest person, currently Japanese businessman Takemitsu Takizaki, according to Forbes real time data.

Some analysts said Facebook's issues would not be easily resolved.

"Unlike Netflix, whose quarterly shortfall we saw as temporary, here we see an evolution of the story, albeit a portion of which we expected," said Daniel Salmon, analyst at BMO Capital Markets.

Others, however, saw a silver lining in Facebook's emphasis on more engaging content and its promotion of stories on its News Feed, which would support revenue over the longer term.

"Bears win this quarter ... but not the war," said Brent Thill, an analyst with Jefferies. 

(Reporting by Vibhuti Sharma, Munsif Vengattil and Devbrat Saha in Bengaluru; Editing by Robin Paxton)

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