UPDATED with closing price: Facebook shares closed down 26.4% in a market rout, knocking a record $230 billion off the company’s market cap.
PREVIOUSLY: A plunge in shares of Facebook parent Meta Platforms Facebook has erased more than than $200 billion of its market value, one of Wall Street’s steepest dips ever.
Shares are changing hands at about $243, down nearly 25% from yesterday’s close. It had hit a 52-week low of $237 on its fourth-quarter financials released after the market closed yesterday. Meta missed on earnings, saw Facebook’s daily active users dip for the first time ever as a public company (DAUs down by 1 million) and cited headwinds from inflation, foreign exchange, and an app tracking transparency feature Apple. Competition is heating up from platforms led by TikTok.
Facebook founder Mark Zuckerberg has therefore been pivoting the company to the so-called metaverse, including the name. Its stock symbol will also be changing from FB to MVRS sometime this quarter. The shift comes with a massive $10 billion investment in the sector that is also making Wall Street wince.
The VR and AV fueled metaverse concept – a network of virtual worlds fueled by social interaction that may also be the next iteration of the Internet — is starting to take hold but still in early stages.
In the near term, Facebook had warned of the squeeze by Apple’s app tracking technology. Apple now asks its device users to opt in, or agree, to having apps track their activity across the web. Turning the feature off makes it harder for companies like Meta to collect data on users. That impacts ad targeting, which drives revenue.
The stock drop had Wall Streeters debating whether yesterday’s news was the bottom, or if there’s more to come; if there are structural changes in the business; and even whether Meta is shifting to a value company in some ways from a growth company, and if that’s okay.
Facebook’s bad day rippled across the sector. Snap, which reports earnings later today, has signaled similar issues with the Apple policy, and trading down 20%. Spotify is off 15% in the wake of its earnings and amid controversy over podcaster Joe Rogan. Twitter and Amazon are each down about 6%.
The tech-heavy Nasdaq is down nearly 1.8%.
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