New York: A historic plunge in the stock price of Facebook’s parent company has erased more than $230bn in its market value, easily the biggest one-day loss in history for a US company.
The 26.4% wipeout in Meta comes amid concerns about its future after the company reported its first ever drop in daily user numbers in its Wednesday earnings report. Facebook rebranded to Meta last year as part of its strategic pivot to becoming a virtual-reality based company. The company’s advertising model has also been hit hard by privacy changes at Apple, which Facebook has said it expects will cost them billions.
The slump in stock price has sent Mark Zuckerberg’s personal wealth tumbling by nearly $30bn.
Meta’s stock fall marked the biggest slide in market value for a US public company, according to a Reuters analysis of Refinitiv data.
Why the Facebook owner’s shares are in freefall
It was a disappointment for a company that investors have become accustomed to delivering spectacular growth. Meta also reported a rare decline in profit due to a sharp increase in expenses as it invests in the “metaverse”.
“Meta CEO Mark Zuckerberg may be keen to coax the world into an alternate reality, but disappointing fourth-quarter results were quick to burst his metaverse bubble,” said Laura Hoy, an equity analyst at Hargreaves Lansdown.
On a Wednesday call with investors, Zuckerberg said he was “proud” of the work the company had done last year but acknowledged the company faced tough competition for attention from rivals including TikTok.
The fall of Meta’s stock helped yank other tech stocks lower on Wall Street on Thursday, abruptly ending a four-day winning streak for the market. The stocks of other social media companies including Twitter and Snap also fell.
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