NEW YORK (AFP) — Facebook’s parent firm Meta on Thursday plunged over $200 billion in stock value — comparable to the size of New Zealand’s economy — after results that raised doubts about the troubled social media giant’s future.
In addition to costs of big investments on its metaverse vision for the internet and trouble for its core ads business, the firm predicted slower growth and even reported its first dip in daily users globally on the signature Facebook platform.
Facebook has long been marked by an insatiable push for growth, and now has nearly two billion daily users, but the results laid bare the challenges facing the social media giant on several front
Shares have been down about 25 percent since shortly after the opening in New York, resulting in a more than $200 billion hit to the company’s market value.
“It was a disaster quarter for Facebook and clearly they have some major headwinds over the next year,” Wedbush’s Dan Ives said.Sign up for the Tech Israel Dailyand never miss Israel’s top tech storiesNewsletter email addressSUBSCRIBEBy signing up, you agree to the terms
Facebook founder Mark Zuckerberg had some $25 billion in value wiped from his personal holding by the rout on Wall Street, according to filings on the company stock he owns.
Meta, which also owns Instagram and WhatsApp, has noted that it faces fierce competition for young users from the likes of explosively growing short-form video platform TikTok.Facebook CEO Mark Zuckerberg delivers the keynote speech at F8, Facebook’s developer conference, in San Jose, California, May 1, 2018. (AP Photo/Marcio Jose Sanchez, File)
Ahead of results, analysts expected 1.95 billion daily active users on Facebook, but Meta reported 1.93 billion — a key indicator for where the platform is headed.ADVERTISEMENT
On the financial side, Meta reported a turnover of $33.67 billion, in line with its forecasts, but it made $10.3 billion in net profit in the fourth quarter, eight percent less than last year.
Investors also recoiled at Facebook’s report of losing roughly one million daily users globally between the last two quarters of 2021 — a fraction of the total but a potential signal of stagnation.
“It’s the first time the user base is shrinking,” said analyst Adam Sarhan from 50 Park Investment. “If the company is not growing, then it’s a complete reset for investors.”
It is essential to note Meta is a still massive and growing on the whole — as 2021 closed, 2.8 billion people used one of its four platforms and messenger services at least once a day, and 3.6 billion at least once a month.Facebook unveiled their new Meta sign at the company headquarters in Menlo Park, California., on October 28, 2021. (AP Photo/Tony Avelar, File)
One way out of Meta’s troubles would be to acquire the next big thing in social media, as it has done previously.
But the company is under considerable scrutiny from US regulators after the damning allegations that emerged from its whistleblower crisis last year.