- Shares in parent company Meta fall 26.4% on Thursday
- Mark Zuckerberg’s personal wealth tumbles by $30bn-plus
Last modified on Thu 3 Feb 2022 17.58 EST
A historic plunge in the stock price of Facebook’s parent company has erased more than $230bn in its market value, easily the biggest one-day loss in history for a US company.
The 26.4% wipeout in Meta comes amid concerns about its future after the company reported its first ever drop in daily user numbers in its Wednesday earnings report. Facebook rebranded to Meta last year as part of its strategic pivot to becoming a virtual-reality based company.
The slump in stock price has reportedly sent Mark Zuckerberg’s personal wealth tumbling by more than $30bn.
It was a disappointment for a company that investors have become accustomed to delivering spectacular growth. Meta also reported a rare decline in profit due to a sharp increase in expenses as it invests in the “metaverse”.
On a Wednesday call with investors, Zuckerberg he was “proud” of the work the company had done last year but acknowledged the company faced tough competition for attention from rivals including TikTok.
The fall of Meta’s stock helped yank other tech stocks lower on Wall Street on Thursday, abruptly ending a four-day winning streak for the market. The stocks of other social media companies including Twitter and Snap also fell.
Spotify also slumped 16.8% after the leading music-streaming service gave investors a weak forecast for a closely watched measure of its earnings. The company has come under pressure after Neil Young pulled his music from its platform to protest the spreading of Covid misinformation by Spotify’s star podcaster, Joe Rogan.
Big technology and communications companies played a big role in driving gains for the broader market throughout the pandemic and much of the recovery in 2021, but the market seems to have shifted, said Brad McMillan, chief investment officer for Commonwealth Financial Network.
“There’s a general sense that what’s been moving the market higher is not going to take us to the next level,” McMillan said. “The question is where is the next growth engine coming from.”
Source: Read Full Article