Meta is at a historic low after news on Wednesday indicated that there was no increase in monthly Facebook users last quarter compared to the prior time, raising concerns about the company’s future growth.
After Meta Platforms Inc.’s fourth-quarter results fell short of analysts’ expectations, Mark Zuckerberg’s net worth plummeted by up to $31 billion in a single day, one of the greatest one-day losses in wealth in history.
Meta is at a historic low after news on Wednesday indicated that there was no increase in monthly Facebook users last quarter compared to the prior time, raising concerns about the company’s future growth. Shares were down 24% at 10:25 a.m. Thursday in New York.
The company’s CEO, Mark Zuckerberg, now has a net worth of roughly $92 billion, down from $120.6 billion as of Wednesday’s market close. It’s enough to knock the 37-year-old off the list of the top 10 richest people in the world.
In addition, Meta’s co-founders are experiencing unprecedented losses in their personal fortunes. 79th-richest person Dustin Moskovitz, worth $21.2 billion as of Wednesday, has lost approximately $3 billion, while Eduardo Saverin, worth $17.5 billion, has lost more than $4 billion.
Meta faces additional challenges as a result of its disappointing earnings. The company is engaged in a number of legal battles, while also trying to justify its strategic change to embrace the metaverse, which is an immersive internet. In the meantime, TikTok and YouTube are gaining popularity with young users.
According to current statistics, Meta was a widely held stock by several investor groups, including hedge funds, making a large number of funds potentially exposed to the share wipe-out. Other institutional investors were significant stockholders as well.
It was also a popular stock among regular investors, who appeared to be zealously buying the drop.
The size of Facebook’s collapse illustrates just how large and powerful tech companies have grown to be, and the drama they can cause when they stumble.
Investors anticipate that the US Federal Reserve’s policy tightening would erode the industry’s stratospheric valuations following years of ultra-low interest rates, placing pressure on large US tech-focused firms in 2022. The Nasdaq, which is dominated by technology and other growth companies, fell more than 9% in January, its worst monthly drop since the March 2020 Coronavirus-induced market disaster.