Kachi Ogbonna

Why is Mark Zuckerberg net worth constantly going down?

Mark was once the 3rd richest person in the world.

Since July 2021, Mark Zuckerberg has fallen nearly 20 places down the billionaires list

The question to ask is, “What is responsible for Mark Zuckerberg’s decline?’

In March 2021 Mark Zuckerberg became the youngest person ever to hit $100 billion net worth. He achieved that feat at the age of 36. Mark went ahead to improve on that record as his net worth further increased to $142 billion just 4 months later. It was that figure that took him to 3rd on the Forbes list of the richest men in the world. In fact, at the rate he was growing then, (even when others were declining), it looked as if it is just a matter of time before he overtook the top two Elon Musk and Jeff Bezos to become the richest man in the world.

But it has not turned out that way. In fact, as at the time of writing this post, Mark Zuckerberg’s net worth on Forbe’s real-time billionaire list is $50.3 billion. And that places him as the 22nd richest man in the world. That means in just over a year he has gone from 3rd to 22nd losing over $90 billion. 2022 in particular has not been the best of years for Mark, because as at January 2022 he was still worth as much as $125 billion. That means he has lost over $70 billion in 2022 alone.

The question once again is ‘Why this sort of decline?’

Why Mark Zuckerberg Net Worth is Dropping?

I did a brief research to find out why the net worth of the Facebook man is going down by the day and there are 6 reasons I could pin this to:

1. Fall in Meta’s Stock

This is of course the most obvious reason Mark Zuckerberg net worth id declining. A bulk of his wealth is tied to Facebook (now Meta). However, since the name change a year ago its stock has lost over 60% of its value. So this is the single biggest contributor to the decline in Mark’s fortune in 2022. Of course, this seems to be general and is currently affecting other tech giants too. But no one has felt it as much as Mark Zuckerberg and his company.

The truth remains that the fall of Facebook (Meta) is the fall of Mark Zuckerberg – he holds 16.8% shares of Meta Platforms.

On February 4th for example, Meta suffered a historic market rout,  as $230 billion of the company’s value was wiped out in a day. It set the record for the largest single-day trading loss for any U.S. company, ever. Not surprisingly, Mark Zuckerberg net worth dropped by $29 billion the same day.

Such heavy fall in the stock market is a direct result of global economic uncertainty . And the economic uncertainty itself has been compounded by certain factors which analysts did envisage. Factors like the Russia-Ukraine war, rising inflation and higher interest rates has all increased volatility in financial markets.

2. The rebranding of Facebook to Meta

This couldn’t have been a coincidence that Mark Zuckerberg’s net worth has never gone north since October 2021 when the name change was announced. Directly or indirectly one must have a bearing on the other.

At least, talking about the one we know, rebranding  from Facebook to Meta and related expenses has cost the company over $10 billion already according to New York Post. 

But the $10 billion spent is not the major issue here. The main issue here is that Mark Zuckerberg’s admittance that ‘Metaverse will be a long term project’ has made most investors to become skeptical. Of course, not many investors are willing to wait that long.

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3. Competition from TikTok

Mark Zuckerberg’s net worth is also declining possibly as a result of the stiff competition the company is receiving from the new kid on the block – TikTok. TikTok has suddenly become the social media of choice for the younger generation. And though Facebook has introduced reels as a way of countering TikTok and retaining most of its users, but the effect of TikTok is still increasing by the day.

Facebook reported its first revenue decline in history in July and that is all down to the TikTok effect. And when Facebook goes down, then Mark Zuckerberg’s net worth will most likely do too.

4. Controversy

Another possible contributor to the decline in Mark Zuckerberg’s net worth is the controversy instigated by Frances Haugen when she testified (with documents about a research) that Instagram actually influences eating disorders and suicidal thoughts in teenage girls.

5. Change in Privacy Policy by Apple

This sounds rather subtle, but at the long run it might end up been the second most important factor affecting Meta’s revenue and by extension Mark Zuckerberg’s net worth. The recent policy update by Apple allows iPhone users determine whether they want apps, such as Facebook, to track their online activities to target advertisements.

What this means is less data available to Facebook to work with.

And we all know that 99% of Facebook revenue comes from advertisement. Meanwhile the major factor that makes advertisers go to Facebook is because of it’s ability to target internet users online activities – thereby their ads are usually more targeted.

In fact, Facebook itself had admitted that the policy change will cost the social media giant at least $10 billion in 2022 alone.

6. Decrease in The Number of Users

Another potential cause of the decline in Mark Zuckerberg’s net worth is the decline in the number of Facebook users. Earlier this year, the company reported a decline in the number of its users for the first time ever. The report says that Facebook lost over 500,000 daily users globally in the fourth quarter of 2021 compared to the previous quarter. That was the first time the company is experiencing a decline in the number of users in 17 years. This is a further confirmation of the competition it is receiving from TikTok.

If you look at the number of users on Facebook (over 2 billion) you might be tempted to interpret 500,000 as insignificant. But if you understand how much the Facebook business model relies on data you will know that such number is a whole lot. In fact, there is still no prove that the decline in the number of users did not contribute to the disastrous collapse in stock price in February 2022.

Conclusion

Almost every business has had it tough in 2022 because of the volatility of the financial markets. But Mark is probably feeling it more than anyone else and this goes a long way to show that the first mover advantage Facebook enjoyed as the social media of choice is eroding gradually.

But I think it will be foolish to write off Mark Zuckerberg yet. No one can bet on his bouncing back to the elite club of those with a net worth of $100 billion or more in no time.

Share with me:

What do you think about the net worth of Mark Zuckerberg going down? Do you see him bouncing back anytime soon? Do you think there is something he is not getting right about his business?

I want to hear from you and the comment section is open for your comments.

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