Logo of Phnom Penh Post newspaper Phnom Penh Post - Facebook parent Meta sheds $200B in stock plummet

Facebook parent Meta sheds $200B in stock plummet

Content image - Phnom Penh Post
Facebook parent Meta was pummeled on Wall Street after doubts about its future in weak results. AFP

Facebook parent Meta sheds $200B in stock plummet

Facebook's parent firm Meta on February 3 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 fronts.

Shares have been down about 25 per cent 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.

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.

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.

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 per cent 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.

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.

The internal documents leaked by ex-worker Frances Haugen highlighted accusations that executives prioritised growth over keeping their billions of users safe.

However, February 3’s dramatic sell-off is the latest to confront a Big Tech firm after a similar liquidation of Netflix shares last month, though the streaming giant has somewhat rebounded since.

Other tech giants such as Apple and Google parent Alphabet have rallied after results – though they both recently posted excellent numbers that calmed jittery markets.

Stocks have risen the last four days as the markets try to rebound from a bruising January pressured by worries over shifting US Federal Reserve policy and uncertainty over the crisis in Ukraine.

But the sharp fall in Meta and some other tech names “is raising doubts about the sustainability of the broader rebound effort”, said Briefing.com analyst Patrick O’Hare.

MOST VIEWED

  • Research key to Kanitha’s rep for expertise

    Sok Kanitha is used to weighing in on controversial issues using a confident approach that signals expertise and authority, and a recent video she made was no exception. Her “Episode 342: The History of NATO” video went live on January 16, 2023 and immediately shot to 30,000 likes and 3,500

  • Cambodia maintains 'Kun Khmer' stance despite Thailand’s boycott threat

    Cambodia has taken the position that it will use the term "Kun Khmer" to refer to the sport of kickboxing at the upcoming Southeast Asian (SEA) Games, and has removed the term Muay from all references to the sport. Despite strong reactions from the Thai

  • Knockout! Kun Khmer replaces ‘Muay’ for Phnom Penh Games

    Cambodia has decided to officially remove the word Muay from the programme of the 32nd Southeast Asian (SEA) Games 2023 in May. “Kun Khmer” will instead be used to represent the Southeast Asian sport of kickboxing, in accordance with the wishes of the Cambodian people. Vath

  • Artificial insemination takes herd from 7 to 700

    Some farms breed local cows or even import bulls from a broad for the purpose of breeding heavier livestock for meat production. One Tbong Khnum farmer has found a more efficient way. Hout Leang employs artificial insemination to fertilise local cows. Thanks to imported “straws”

  • New int’l airport nearly half complete as travel industry returns to life

    Construction of a new airport that is slated to serve the capital has passed the 43 per cent completion mark, raising prospects for a proper recovery in the civil aviation and tourism sectors as international travellers return to the Kingdom in increasingly large numbers. The figure

  • Chinese group tours return to Cambodia starting Feb 6

    Cambodia is among 20 countries selected by Beijing for a pilot programme allowing travel agencies to provide international group tours as well as flight and hotel packages to Chinese citizens, following a three-year ban. As the days tick down until the programme kicks off on February 6,