Mark Zuckerberg's $71 Billion Wealth Wipeout Puts Focus On Meta Struggle

Mark Zuckerberg’s $71 Billion Wealth Wipeout Puts Focus On Meta Struggle

Mark Zuckerberg, 38, had a $106 billion net worth less than two years ago. The actual world has paid a heavy price for Mark Zuckerberg’s decision to pivot towards the metaverse.

The wealth lost by the CEO of Meta Platforms Inc. stands out even in a difficult year for nearly all US tech giants. The most among the extremely wealthy people tracked by the Bloomberg Billionaires Index, his fortune has been reduced by more than half, down by $71 billion so far this year. His net worth of $55.9 billion places him 20th out of all billionaires in the world, which is his lowest position since 2014 and places him behind three Waltons and two Koch family members.

Mark Zuckerberg's $71 Billion Wealth Wipeout Puts Focus On Meta Struggle
Mark Zuckerberg’s $71 Billion Wealth Wipeout Puts Focus On Meta Struggle

Only Bill Gates and Jeff Bezos command larger fortunes today than Zuckerberg, 38, who was worth $106 billion and part of an exclusive group of global billionaires less than two years ago. When the company’s shares hit a high of $382 in September 2021, his wealth grew to a peak of $142 billion.

In the month after, Zuckerberg unveiled Meta and altered Facebook Inc.’s name. From there, things have mostly gone south as it tries to establish itself in the tech world.

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Recent earnings reports from it have been terrible. When the firm announced in February that there had been no increase in monthly Facebook users, its stock price fell dramatically and Zuckerberg’s fortune was reduced by $31 billion, one of the worst one-day decreases in wealth ever. Other problems include Instagram’s decision to invest in Reels, a competitor to TikTok’s short-form video platform, despite the fact that it will generate less in advertising revenue than TikTok. Additionally, the industry as a whole has been impacted by lower marketing spending because of worries about an economic slowdown.

According to Laura Martin, senior internet analyst at Needham & Co., the company’s investments in the metaverse are also depressing the stock. In the upcoming three to five years, Zuckerberg has stated that he anticipates the initiative to experience “substantial” financial losses.

In the meantime, Meta “has to get these users back from TikTok,” said Martin. It’s also hampered by “excessive regulatory scrutiny and intervention,” she said.

The Menlo Park, California-based company is faring worse in 2022 than most of its FAANG peers. It’s down about 57% this year, far more than the declines of 14% for Apple Inc., 26% for Inc. and 29% for Google parent Alphabet Inc. Meta is even narrowing the gap in 2022 losses with Netflix Inc., which is down about 60%.

If not for its endeavor into virtual reality, the social media giant “would be more in line with where Alphabet is,” said Mandeep Singh, technology analyst at Bloomberg Intelligence. Meta could circumvent this issue by spinning off some of its other businesses, like WhatsApp or Instagram, he said.

Almost all of Zuckerberg’s wealth is tied up in Meta stock. He holds more than 350 million shares, according to the company’s latest proxy statement. The price was little changed at $146.18 at 12:22 pm in New York.

Zuckerberg has attempted a rebranding of sorts. He recently uploaded a video of himself practicing mixed martial arts and repeatedly referred to himself as a “product designer” in a three-hour conversation on Joe Rogan’s podcast.

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