Thu, 13 Dec 2018
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Los Angeles

Zuckerberg's personal fortune tumbled dramatically this year

By Sheetal Sukhija, Los Angeles News
18 Nov 2018, 12:54 GMT+10

CALIFORNIA, U.S. - Hit by a string of scandals since the start of the year, shares of the world's largest social media company, Facebook hit a low point this week.

A damaging report published by The New York Times this week added another shocking controversy to the growing troubles facing Facebook, and caused the company's shares to slide to their lowest since April 2017.

However, the company's boss, Facebook CEO Mark Zuckerberg felt a bigger impact, with the scandals wiping off $17.3 billion off his personal wealth so far this year.

The personal losses have led to Zuckerberg losing his place as the third richest person in the world, dropping to the sixth position on the Bloomberg Billionaires Index.

The 34-year-old Facebook CEO's fortune now stands at $55.3 billion.

According to the Bloomberg index, Zuckerberg's wealth has tumbled more than $31 billion from its peak on July 25.

New allegations, fresh trouble

The NYT report alleged that Facebook hired a Washington-based Republican-owned political consulting and public relations firm called Definers Public Affairs which used certain questionable tactics.

According to the report, the conservative PR firm worked to delay, deflect and deny any scrutiny that Facebook faced over its handling of the widespread Russian disinformation campaign during the 2016 U.S. presidential election.

It also alleged that Definers Public Affairs used similar tactics over criticism that the company generated over the increasing spread of hate speech on its platform.

Further, the NYTreport suggested that the PR firm "dug up dirt on the company's competitors and its critics."

It alleged that Facebook leadership did not act fast enough to address the growing menace of fake news and neglected to investigate Russian interference in the 2016 election.

The report claims that Facebook attempted to discredit its critics by often linking them to billionaire philanthropist George Soros, who holds shares of the company, but has often publicly criticized the firm.

Soros is frequently target by the Washington-based firm in anti-Semitic attacks.

It went on to allege that the PR firm "encouraged the depiction of Facebook's critics as anti-Semites and had published news articles criticizing Facebook's competitors."

Soon after the report was published, Facebook COO Sheryl Sandberg issued a statement denying any knowledge of the firm.

Facebook's official response to the allegations was that the company used the consultant Definers Public Affairs to look into the funding of "Freedom from Facebook," which the company believes is funded by Soros as opposed to being a grassroots campaign.

Facebook added, "To suggest that this was an anti-Semitic attack is reprehensible and untrue."

The company also refuted allegations that it was slow to investigate Russian activity during the 2016 election.

Meanwhile, Zuckerberg's official response to the allegations made by NYT came during a press call on Thursday, when the company's CEO denied having any prior knowledge about the controversial PR firm.

He told reporters, "After reading the article, I got on the phone with our team and we are no longer working with this firm."

However, the following day, Facebook faced more trouble, after a group of Democratic senators demanded that Zuckerberg respond to the allegations made in the report about the company's use of contracts to deal with critics.

Following the announcement on Friday, Facebook shares slid 3 percent to $139.53, the lowest since April 2017.

Subsequently, certain Facebook investors who have been pressurizing Zuckerberg to step down as the company's chairman, further intensified their pressure.

The hedge fund Trillium Asset Management, which owns a substantial stake in the social media giant repeated its calls for Zuckerberg to step down as board chairman.

Jonas Kron, Senior Vice President at Trillium said, "Facebook is behaving like its a special snowflake. Its not. It is a company and companies need to have a separation of chair and CEO."

Kron argued that the latest revelations offered fresh reasons for Zuckerberg to relinquish his dual role as chairman and CEO.

He said, "The latest report should remove any lingering doubts that some may have had."

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