Mark Zuckerberg, the chairman, CEO and co-founder of Facebook, paid a steep price for two words, according to a report today by Forbes — and he wasn’t even the one who said the words.
The words are “meaningfully” and “aggressive,” and they came from Facebook’s CFO.
In an article running today under the headline “How Two Words From Facebook’s CFO Are Costing Mark Zuckerberg Billions,” Forbes reports: “Investors were unloading shares of Facebook on Thursday after management warned that advertising revenue could ‘meaningfully’ slow and it was readying to make ‘aggressive’ investments. These choice words sent shares of Facebook down 5% and knocked about $2.5 billion off CEO Mark Zuckerberg’s fortune.”
The price decline happened even as Facebook is coming off a record-breaking quarter that exceeded analysts’ expectations, Forbes notes. And the report suggests that investors may be overreacting.
The report quotes J.P.Morgan analyst Doug Anmuth saying: “Many will hang on ‘meaningfully’ lower ad revenue growth in ’17, but we think management’s top-line comments were largely consistent with what they said at 2Q.”
Analysts had reportedly already been expecting Facebook’s ad revenue growth to slow from 50% to 35% in 2017, the report notes.
Forbes adds: “Investors were also zeroing in on Facebook’s promise to spend ‘aggressively’ next year. The company said it plans to continue shelling out the big bucks for new engineering and technology hires, as well as on ongoing efforts to expand its data centers.”