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Two of tech’s richest billionaires have had a bad day, with tumbling stocks wiping billions off their net worth.
As of 3 pm ET, Larry Ellison, founder of software firm Oracle, dropped $5 billion since markets opened Tuesday morning, while Facebook CEO Mark Zuckerberg’s net worth dropped $2.7 billion. The fall in Zuckerberg's fortune follows a $5 billion plunge on Monday.
Ellison, the tenth richest person in the world, is worth an estimated $58 billion. Zuckerberg, now the world's seventh richest, clocks in at $66.8 billion, according to Forbes’ real-time ranking of the world’s billionaires.
Oracle stock plummeted nearly 9% through 3 p.m. eastern time on Tuesday, following a disappointing quarterly earnings report released on Monday afternoon. The report, which covered the company’s third quarter, had lower than expected growth in cloud-software sales, an area where the company had doubled down in 2016. A fourth-quarter forecast reported total cloud sales would increase only 19% to 23%, not the 27% for which analysts had hoped. The problem, analysts say, lies in increased competition from the likes of Microsoft, Salesforce and Amazon, whose cloud software seems to be growing faster than Oracle’s.
Since some 85% of Ellison’s net worth lies in Oracle shares, the plunging stock has a direct effect on his wealth.
Zuckerberg’s slumping fortune — it's down nearly $8 billion in less than two days — results from a decline Facebook share price, which dropped nearly 5% through 3 p.m. eastern time. Zuckerberg, who owns about 16% of Facebook’s shares, saw his net worth start to plummet Monday, the first day of trading following reports from The New York Times and The Guardian that data firm Cambridge Analytica was accused of improperly collecting information on more than 50 million Facebook users. Cambridge Analytica performed work for Donald Trump's presidential campaign.
Cambridge Analytica, which suspended its CEO Alexander Nix on Tuesday, has released a statement that it "fully complies with Facebook's terms of service" and that it "only receives and uses data that has been obtained legally and fairly." In the Times report, Facebook's deputy general counsel, Paul Grewal, called the misuse of data "a scam — and a fraud." He continued: “We will take whatever steps are required to see that the data in question is deleted once and for all — and take action against all offending parties." Facebook has suspended Cambridge Analytica from the platform.
The startling news — which comes amid criticism that Facebook isn't doing what it can to protect its users from fake news and partisan targeting — has only gotten worse. On Monday evening, The New York Times reported that Alex Stamos, Facebook’s chief information security officer, plans to leave the company in August due to disagreements over the handling of fake news.
Additionally, the Federal Trade Commission announced on Tuesday that it plans to investigate whether Facebook violated a 2011 consent decree that requires user permission and knowledge for data to be shared.
The scrutiny of Facebook, is very likely to continue. And that means Facebook stock — and Zuckerberg’s net worth — may face more tumultuous days ahead.
Source: Forbes
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