Facebook Tanks

Uploaded on 2022-02-09 in TECHNOLOGY-Key Areas-Social Media, FREE TO VIEW, BUSINESS-Services-Financial

Facebook's owner Meta has experienced a stock market value slump by more than $230bn (£169bn) last week - a record historic loss for a US firm. Its shares fell 26.4% after quarterly figures disappointed investors. The company's share price slump  saw chief executive Mark Zuckerberg's personal net worth fall by $31bn, according to the Bloomberg Billionaires Index. 

Facebook's daily active users (DAUs) had dropped for the first time in its 18-year history and its market capitalisation fell from$898.5 billion to $661 billion.

The drop in Zuckerberg's fortune was equivalent to the annual gross domestic product of Estonia, although with an estimated net worth of $90bn, he remains one of the richest people in the world. 

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. 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. 

Another issue for Meta is that it’s seeing traction with Reels, a video format similar to TikTok, but the company doesn’t make as much money when users browse the Reels section as it does when users spend time on their main feeds or watching related “stories” content.

Big technology and communications companies have played a significant role in driving gains for the wider US stock market during the Coronavirus pandemic but the market seems to have shifted.  “The question is where is the next growth engine coming from.” commented one market analyst.

Marketwatch:      Fortune:     BBC:     Yahoo:      USA Today:      MSN:     Guardian:    Jordan News:   

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