Business & Economy
Facebook’s Zuckerberg drops out of Forbes America Top 10 list
Mark Zuckerberg‘s personal fortune has nosedived to $76.8 billion in the last year, taking him off the list of the 10 richest people in America. He now holds the 11th spot on The Forbes 400 list of the U.S.’ wealthiest people.
Four years after launching Facebook, in 2008, Zuckerberg first hit the billion-dollar mark. When he debuted at No. 321 on The Forbes 400 with a $1.5 billion net worth at age 23, he was the youngest self-made billionaire ever. Zuckerberg’s net worth climbed by about a dozen times to $17.5 billion by 2011.
Following Facebook’s infamously underwhelming IPO in 2012, Mark Zuckerberg’s ranking on The Forbes 400 dropped from 14 to 36. But that wasn’t for very long. Zuckerberg recovered the next year, and his wealth has since continued to increase. Zuckerberg’s net worth soared to $134.5 billion last year, his biggest net worth ever, thanks to Facebook’s ad machine, which consistently produced enough cash to dazzle investors despite the company’s litany of scandals and controversies.
On this year’s list, which utilised stock prices from September 2, Zuck, who is valued at $57.7 billion, is behind other industry titans, including former Microsoft CEO Steve Ballmer, Walmart heir Jim Walton, former New York City mayor Michael Bloomberg, and Google founders Larry Page and Sergey Brin. Nobody in America has experienced a year of more financial loss than Mark Zuckerberg.
He dropped out of the top 10, which can be credited to his real estate purchases and Meta‘s (formerly Facebook) plummeting stock price. Since the Forbes 400 of last year, which utilised stock values as of September 3, 2021, shares have fallen by 57%. The market downturn has typically affected tech firms, but Meta’s collapse has outpaced that of the Nasdaq (-9.8%) and the S&P 500 (-13.5%), as well as Microsoft’s 14% dip, Alphabet’s 25% drop, and Amazon’s 27% plunge.
A privacy policy tweak from Apple last year that made it more difficult for tech companies to monitor users across applications and had an effect on Meta’s ad sales alarmed investors. With a 1% reduction to $28.8 billion, Meta disclosed its first-ever quarterly sales fall in July.
“Facebook makes most of its money from advertising, and now it just doesn’t have that data anymore,” says Mark Zgutowicz, an analyst at research and investment banking firm Benchmark. “All those data signals went away, which basically means that advertisers are having trouble telling whether a campaign was successful or not.”
TikTok is drawing away advertisers, as well as valuable Gen Z and millennial users, which is making the situation for Meta worse. Meta reported its first-ever quarterly decline in daily active users in February. According to a Wall Street Journal story, Meta’s TikTok clone, Instagram Reels, is finding it difficult to compete as evidenced by their internal analysis and user opinion.
A little decline in sales could be sustainable under normal conditions, but Meta is also significantly investing in virtual reality and the metaverse, which is hurting operational profit. The company’s Meta Reality Labs segment suffered a $10 billion loss in 2021. While Zuckerberg just wants to discuss the metaverse, investors haven’t been as thrilled. According to Zgutowicz, “it’s a long-term investment and, at the moment, it’s kind of a cash suck.”
Forbes estimates that nearly all of Zuckerberg’s money is invested in Meta shares, indicating that he is placing his massive fortune and the long-term prospects of the company-on the metaverse. It will be interesting to watch if he can overcome his early setbacks. Zuckerberg received widespread jeers when he uploaded a selfie to Meta’s brand-new virtual reality social network Horizon Worlds last month. Later, he acknowledged that the image was “very rudimentary,” but he vowed to make significant graphic enhancements shortly. Since then, Meta stock has dropped by 8%.
How is the loss affecting Meta?
Zuckerberg announced a freeze on hiring new staff amid plans to cut costs by at least 10% in the coming months. Saying the group would ‘further restructure’ due to its struggling advertising business, this is to remedy the near 60% loss of its value in the past year.
Over the coming year, he claimed, Meta will “steadily reduce headcount growth.” Plans to employ engineers might be reduced by 30%. The news comes as Meta takes a calculated risk with its prediction that the “Metaverse,” or virtual world, will generate billions of pounds in income.
The company is presently experiencing difficulties, though, as a global recession that is increasingly likely approaches. And a lot of specialists continue to have grave concerns about the Metaverse’s intended function.
Even while it seems like Zuckerberg and his business are losing money, it could not be just him. As Silicon Valley struggles with the possibility of a recession, other IT companies have also reduced their operations. Google stated last month that it will halt recruiting and reduce benefits. Microsoft and Apple have already imposed hiring curbs.
