Plan to Fire Zuckerberg as Facebook Chairman Drawn Up

Plan to Fire Zuckerberg as Facebook Chairman Drawn Up

On Thursday afternoon, Facebook watched its capitalization drop by $119 billion, lowering its valuation to $510 billion, which represents a 19 percent drop, according to CNBC.

Facebook had 2.23 billion monthly users as of June 30, up 11 percent from a year earlier, but well short of what industry analysts had been expecting.

Investors began to panic after the social media company said during an earnings call Wednesday that revenue growth would continue to decelerate for the rest of the year. It reported revenue of $13.2 billion for the quarter, missing Wall Street estimates and rattling investors.

Other big investors of Nasdaq-listed Facebook also took a hit as disappointing second-quarter results obliterated US$119 billion of market value, the most ever in a day for a USA company.

The complaint filed by shareholder James Kacouris in Manhattan federal court accused Facebook, Mr Zuckerberg and chief financial officer David Wehner of making misleading statements about or failing to disclose slowing revenue growth, falling operating margins, and declines in active users. On Thursday, he lost $17 billion of his fortune, Facebook shares dipped nearly 20 percent, and now, some shareholders want his influence on the company reduced. That is believed to be the largest one-day drop of any company on the American stock market.

Patsky said his company's next ask of Facebook and its board is just that - a separation of chair and CEO. "It's the F in FAANG, but what's to say that, 10 years from now, Facebook isn't the next Myspace and something else has taken its place?"

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Siva Vaidhyanathan, a media studies professor at the University of Virginia and author of the new book, "Antisocial Media: How Facebook Disconnects Us and Undermines Democracy", dismissed the significance of the stock plunge. The company is grappling with new data laws in Europe, criticism over its content policies and privacy issues. I saw them sprawled out across airports recently when I traveled, and it was definitely weird to see, letting me know they're protecting my data more, on my phone. all while I know they don't.

The slower growth comes as the company grappled with privacy scandals.

Until now, he said, there was a sense that the vast majority of users didn't fully understand Facebook's business.

Facebook has also faced public image problems because of the way Russian Federation used the site to try to influence the 2016 USA presidential election. The decline in Facebook's market value was roughly equivalent to the entire value of some of the country's best-known companies, including McDonald's, Nike and industrial conglomerate 3M.

Zuckerberg even noted during a call with analysts that "we're investing so much in security that it will significantly impact our profitability".

What drove the selloff: Investor concern about Facebook's growth cooling down.

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