Facebook’s value plummets by £115BILLION as number of users slows after privacy data scandal
FACEBOOK'S market value has plummeted by £115billion after the social network became embroiled in a data scandal affecting millions of users, it has emerged.
Earlier today it was thought the site would announce a drop in users across Europe for the first time following the introduction of GDPR rules from the European Union this year.
The company, co-founded by Mark Zuckerberg, announced this evening their monthly active users rose to 2.23 billion, but still fell short of a consensus estimate of 2.25 billion from Thomson Reuters.
Shares in Facebook, which have risen about 23 percent this year, fell 22 per cent to $198.71 in trading after the bell as investors reacted to the results.
The Cambridge Analytica scandal prompted several apologies from Chief Executive Mark Zuckerberg and generated calls for users to desert Facebook earlier this year.
Prior to the announcement, it was predicted that the number of active users visiting the social network site across Europe would drop or flat line.
And according to the Mail, Barclays has said Facebook has 20 million European users under the age of 16, and under the new rules, these users now need parental consent to stay on the site.
Barclays said: "We expect some drop off, similar to other companies like Twitter and Snapchat from the kids issue."
However, the poor results have not affected the net income of Facebook shareholders as it rose to $5.11 billion, or $1.74 per share compared to $3.89 billion, or $1.32 per share, a year earlier.
Analysts had estimated a profit of $1.72 per share, on revenue of $13.36 billion
GDPR came into effect on May 25 and stipulates that companies must request consent from their users in order to access personal data for advertising purposes, and companies that do not comply can face a fine.
To be GDPR-compliant, Facebook rolled out a security check to users which asked them to review the personal information they consented to sharing for targeted advertising, as well as being asked to consent to facial recognition.
But according to the Mail, analysts believe users may have been "scared off" by the explicit details about how their data is being used by the social network.
Facebook is expected to announce 2.25 billion monthly active users, and 1.49 billion daily active users during the latest quarterly results.
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