On Thursday, Meta Platforms, the company that owns Facebook, had its stock market value plummet by more than $230 billion (£169 billion), a record daily loss for a US company.
Its stock dropped 26.4 percent after the company’s quarterly results disappointed investors.
Facebook’s daily active users (DAUs) have declined for the first time in the company’s 18-year history, according to Meta.
According to the Bloomberg Billionaires Index, chief executive Mark Zuckerberg’s net worth has dropped by $31 billion as a result of the company’s share price decline.
Mr Zuckerberg’s personal fortune plummeted by an amount equal to Estonia’s annual gross domestic product.
That comes after Meta disclosed that Facebook’s DAUs declined to 1.929 billion in the three months leading up to the end of December, down from 1.930 billion in the previous quarter.
It was the first time this metric of activity on the world’s largest social network has gone in the opposite direction.
Meta also warned that revenue growth would decelerate as a result of competition from competitor platforms such as TikTok and YouTube, as well as advertisers pulling back on spending.
Mr. Zuckerberg claimed that the company’s sales growth had been hampered by audiences, particularly younger users, defecting to competitors.
Revenues for the first quarter of this year are estimated to be between $27 billion and $29 billion, which is lower than analysts had predicted.
Despite investing in video services to compete with TikTok, which is owned by Chinese technology firm ByteDance, the corporation makes less money from those offers than it does from its standard Facebook and Instagram feeds.
It’s obvious that Meta is dealing with a slew of issues.
Apple implemented its App Tracking Transparency policy last year.
It allows users to choose whether or not they want to be tracked across the internet by firms such as Meta, which may then sell that information to advertising.
That is a huge issue for Facebook, because it makes money by gathering information about you and selling it to marketers.
Partly as a result of this, the company’s quarterly statistics indicated a decrease in advertising revenue.
TikTok, one of Meta’s competitors, is also garnering a younger following. In addition, user growth has slowed around the world.
There are also longer-term considerations to consider.
Advertising is how Meta makes money. However, the company’s name has been modified to reflect a concept – the Metaverse – that does not yet exist and will not do so for many years.
Even if there is little indication that people desire to live their lives in virtual reality, Mark Zuckerberg is determined to spending tens of billions of dollars on the project.
Many investors are unfriending as a result of this.
Meta, which owns the world’s second largest digital advertising platform after Google, has also been impacted by Apple’s operating system’s privacy restrictions.
The changes, which make it more difficult for firms to target and measure their Facebook and Instagram advertising, are expected to cost “in the range of $10 billion” this year, according to the firm.
“Clearly, Meta was hit more than its competitors, while other social media platforms like Snap showed robust results,” said Sachin Mittal, DBS Bank’s head of telecom and internet sector research.
“While Apple’s adjustments have had a broad negative impact on the whole tech sector, we believe that players who rely less on targeted ads or have stronger algorithms to cope with Apple’s changes will still do well.”
During Thursday’s regular trading day, Meta’s share price plummeted, dragging down other social media companies such as Twitter, Snap, and Pinterest.
Snap’s stock, on the other hand, soared nearly 60% in after-hours trading after the company declared its first quarterly profit.