- The value of Facebook has plummeted by more than $232 billion.
- Apple’s $182 billion loss in September 2020 set the previous record for market value dropped in a single day.
- The stock dropped after Facebook revealed lower-than-expected first-quarter revenue on Wednesday.
On Thursday, Meta, the parent company, suffered Facebook stock market loss of $232 billion in value. The stock market in the United States has never seen such a steep loss in value in a single day.
Meta’s drop surpassed Apple’s $182 billion market value loss in September 2020, which was based on a weaker-than-expected sales projection.
The seven largest stock market declines in history have all happened in the previous two years, as the valuations of Apple, Microsoft, Tesla, and Amazon have skyrocketed. Prior to 2020, Facebook had the biggest reduction, with a $119 billion drop in 2018. This happened when Facebook’s revenue prediction fell short of analyst expectations.
The company’s stock has dropped in value as it looks beyond its present companies, such as Facebook, Instagram, and WhatsApp, to the metaverse, a virtual world built on new technologies. Meta’s investment in the metaverse resulted in a $10 billion financial loss in 2021, according to Chief Executive Officer Mark Zuckerberg.
On Thursday, Meta Platforms, the company that owns Facebook, had its stock market value plummet by more than $230 billion (£169 billion), a record-day loss for a US company. Its stock dropped 26.4 percent after the company’s quarterly results disappointed investors. Facebook’s daily active users (DAUs) have declined for the first time in the company’s 18-year existence, according to Meta.
Mark Zuckerberg’s Net Worth has Dropped
According to the Bloomberg Billionaires Index, chief executive Mark Zuckerberg’s net worth has dropped by $31 billion as a result of the company’s share price decline. Mr. Zuckerberg’s personal wealth plummeted by an amount equal to Estonia’s yearly gross domestic product. Even with that decline, Mr. Zuckerberg still has a net worth of about $90 billion, making him one of the world’s wealthiest individuals.
That comes after Meta disclosed that Facebook’s DAUs dropped to 1.929 billion in the three months ending in December, down from 1.930 billion the previous quarter. It was the first time this metric of activity on the world’s largest social network has gone in the other direction. On the eve of the 18th anniversary of Facebook’s creation,
Meta’s stock price plummeted. Meta also warned that revenue growth will decelerate as a result of competition from competitor platforms like TikTok and YouTube, as well as advertisers pulling back on spending.
Mr. Zuckerberg said that the company’s sales growth had been hampered by audiences, particularly younger users, defecting to competitors. Revenues for the first quarter of this year are estimated to be between $27 billion and $29 billion, which is lower than experts had predicted. Facebook stock market is not getting stable as their prediction.
Despite investing in video services to compete with TikTok, which is owned by Chinese technology firm ByteDance, the corporation generates less money from those offers than it does from its standard Facebook and Instagram feeds. It’s obvious that Meta is dealing with a slew of issues.
Apple implemented its App Tracking Transparency policy last year. It allows users to select whether or not they want to be followed throughout the internet by firms like as Meta, who may then sell that information to advertising.
That is a huge issue for Facebook since it generates money by gathering information about you and selling it to marketers. Partly as a consequence of this, the company’s quarterly statistics indicated a decrease in advertising revenue.
TikTok, one of Meta’s competitors, is also garnering a younger following. In addition, user growth has slowed throughout the globe. There are also longer-term considerations to consider.
Advertising is how Meta generates money. Despite this, the company’s name has been modified to reflect a concept – the Metaverse – that does not yet exist and will not do so for many years. Even if there is no indication that people desire to live their lives in virtual reality, Mark Zuckerberg is determined to invest tens of billions of dollars in the project. Many investors are unfriending as a result of this.
Meta, which controls the world’s second-biggest digital advertising platform behind Google, has also been impacted by Apple’s operating system’s privacy restrictions. The changes, which make it more difficult for firms to target and assess their Facebook and Instagram advertising, are expected to cost “in the range of $10 billion” this year, according to the company. “Clearly, Meta was hit more than its competitors, while other social media platforms like Snap showed robust earnings,” said Sachin Mittal, DBS Bank’s head of telecom and internet sector research.
“While Apple’s adjustments have had a wide negative effect on the whole tech industry, we believe that players that rely less on targeted advertisements or have stronger algorithms to deal with Apple’s changes will still perform well.”
During Thursday’s normal trading day, Meta’s share price plummeted, dragging down other social media companies such as Twitter, Snap, and Pinterest. Snap’s stock, on the other hand, soared over 60% in after-hours trading after the company declared its first quarterly profit.