Facebook owner Meta sees biggest ever stock market loss
4-02-2022, 08:53

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Facebook's owner Meta Platforms saw its stock market value slump by more than $230bn (£169bn) on Thursday, in a record daily loss for a US firm.

Its shares fell 26.4% after quarterly figures disappointed investors.

Meta also said that Facebook's daily active users (DAUs) had dropped for the first time in its 18-year history.

The company's share price slide saw chief executive Mark Zuckerberg's net worth fall by $31bn, according to the Bloomberg Billionaires Index.

The drop in Mr Zuckerberg's personal fortune was equivalent to the annual gross domestic product of Estonia.

It came after Meta revealed that Facebook's DAUs fell to 1.929bn in the three months to the end of December, compared to 1.930bn in the previous quarter.

It was the first time ever that this measure of activity on the world's biggest social network had gone into reverse.

Meta also warned of slowing revenue growth in the face of competition from rival platforms including TikTok and YouTube, while advertisers were also cutting spending.

Mr Zuckerberg said the firm's sales growth had been hurt as audiences, especially younger users, had left for rivals.

The firm forecast revenues of between $27bn and $29bn for the first quarter of this year, which was lower than analysts had expected.

Although the company has been making investments in video services to compete with TikTok, owned by Chinese technology giant ByteDance, it makes less money from those offerings than its traditional Facebook and Instagram feeds.

Meta, which owns the world's second largest digital advertising platform after Google, also said it had been hit by privacy changes on Apple's operating system.

The changes, which make it harder for brands to target and measure their advertising on Facebook and Instagram, could have an impact "in the order of $10bn" for this year, the firm said.

Before the changes Meta used to target advertisements by tracking how Apple users interacted with apps and websites but can no longer do this.

"Clearly Meta got more impacted compared to its rivals as other social media like Snap posted healthy results," said Sachin Mittal, head of telecom and internet sector research at DBS Bank.

"While there has been a broad negative impact on the whole tech sector, we reckon players with lower reliance on targeted ads or better algorithms to cope with Apple's changes would still do well."

Meta's share price slump also dragged on other social media platforms, including Twitter, Snap and Pinterest during Thursday's regular trading session.

However, Snap's shares jumped by almost 60% in after-hours trade as it reported its first ever quarterly profit.

 

BBC

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