Facebook’s Meta Loses $200bn In Value
As owner Meta takes a $200 billion share damage, Facebook experiences its first-ever dip in daily active users.
After data that raised worries about the struggling social media giant’s future, Meta’s parent company dropped almost $200 billion in stock value on Thursday, roughly equivalent to the amount of New Zealand’s economy.
Aside from the price of large investments in its internet metaverse vision and problems in its primary advertising business, the company forecasted slower growth and even saw a drop in daily users on its flagship Facebook platform.
Facebook has long been known for its ravenous desire to expand, and it currently has about two billion daily users, but the results revealed the company’s struggles on multiple fronts.
Shortly after the market opened in New York, shares were down 25.6 percent, resulting in a $200 billion drop in the company’s market worth.
“It’s a black-eye quarter,” said Dan Ives of Wedbush.
According to documents on the firm shares he holds, the rout on Wall Street wiped $20 billion from Facebook founder Mark Zuckerberg’s personal holdings.
– Adding to market skepticism – Meta, which also owns Instagram and WhatsApp, has stated that it faces intense competition for young consumers from platforms such as TikTok, which is rapidly developing.
Analysts projected 1.95 billion daily active users on Facebook, but Meta reported 1.93 billion, a significant indicator of the company’s development trajectory as people choose to interact with its services.
On the financial side, Meta generated $33.67 billion in revenue, which was in line with expectations, but it earned $10.3 billion in net profit in the fourth quarter, which was 8% lower than the previous year.
One way out of its problems, as it has in the past, would be to acquire the next big thing in social media.
However, following the devastating charges that surfaced from its whistleblower issue last year, Meta is being being scrutinized by US regulators.
Ex-employee Frances Haugen revealed confidential documents that alleged bosses prioritized expansion over the safety of their billions of customers.
However, after a similar liquidation of Netflix shares last month, Thursday’s massive sell-off is the latest to hit a Big Tech firm, albeit the streaming giant has since recovered considerably.
Other major behemoths like Apple and Alphabet, the parent company of Google, have risen in response to the news, despite the fact that they also just delivered fantastic results that calmed nervous markets.
Stocks have climbed over the past four days as investors strive to recover from a tumultuous January, which was fueled by concerns about the US Federal Reserve’s policy shifts and the Ukraine crisis.
But, according to Briefing.com analyst Patrick O’Hare, the shap dip in Meta and some other tech firms “raises worries about the sustainability of the broader rebound effort.”
