Meta, the parent company of Facebook, Instagram and WhatsApp, among others, has lost more than USD 230 billion in market value after the opening of the stock exchanges in New York. The stock fell 25 percent after a severely disappointing quarterly report from the social media group.
It is the largest single-day fall in value of a single company in US stock market history in dollars, reports financial news agency Bloomberg.
For the first time in its existence, the Facebook platform, which was previously the namesake for the entire group, attracted fewer users than in the previous quarter. In addition, Meta’s growth prospects were disappointing. The company is forecasting first-quarter revenue of between $27 billion and $29 billion. That would mean a growth of between 3 and 11 percent, much less than what experts generally expected.
The social media group has been hit from various quarters. The company reported disappointing ad sales. This is largely due to Apple’s new privacy rules. These make it more difficult for companies like Meta to collect data from visitors who own an iPhone. And it is precisely that data that is important for advertisers. And ads are by far the most important source of income for Facebook.
CEO Mark Zuckerburg stated that Facebook is also increasingly affected by TikTok, the app of the Chinese ByteDance. People are on TikTok more often and for longer, which is at the expense of time on Facebook. Supervisors and regulatory authorities are also taking an increasingly critical look at Meta.
Tech exchange Nasdaq, in which Meta is a heavyweight, was already at a loss of 2.2 percent halfway through the trading day. The broad S&P 500 fell 1.4 percent to 4,524 points and the Dow-Jones index fell 0.8 percent to 35,358 points. Other social media companies were also pulled down on the stock market due to concerns about Meta. Snap, Snapchat’s parent company, fell about 20 percent. Twitter lost just under 6 percent.
The results of Meta were yet another setback for investors in tech companies. Netflix previously reported slowing growth. That share also immediately lost tens of percent. Streaming service Spotify was also unable to live up to the high expectations and lost heavily. Payment service PayPal went down earlier this week.
This makes tech stocks the worst performing stocks on the global stock exchanges this year. Last year they were the absolute stars. They have now largely lost those profits. Alphabet, the parent company of Google, was a positive exception. That company exceeded the high expectations and was rewarded with a substantial price gain.
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