Image: © Anthony Quintano via Wikimedia Commons

Facebook’s share price drops by 20 percent

Let's be clear though: the company's still making money. Just less money than they hoped they'd be making.

Let's be clear, Facebook's still making money. They're just making less money than they'd hoped, and shareholders are spooked.

What it means: Most private companies are owned by shareholders, i.e. people who put in money into the organisation in exchange for a cut of the profits. If lots of people want a share, they can get pricey, and the company's total value goes up... if no-one wants one, they'll be pretty cheap.

Facebook's share price has dropped by 20% – the biggest fall in their history. That means lots of people have sold off their Facebook shares, no longer wanting to be part of the company's financial backing.

Why? On a phone call yesterday, CEO Mark Zuckerberg shared some bad news. They're earning less than they thought they'd be by now, have less new users than they thought they would, and need to spend a lot of money improving their security measures as a result of the Cambridge Analytica privacy scandal.

Users in Europe are also starting to opt out of personalised ads as a result of GDPR, the new data regulations which came into place recently.

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