Investors rushed to sell shares of Facebook’s parent company Meta. A Bloomberg report said that the stock market of Meta fell 24% in just one day in the US market. This was mainly due to Meta’s poor earnings. Meta may suffer losses of up to $ 200 billion. Meta may suffer a loss of $ 200 billion. This equates to the market value of 470 of the 500 members in the Standard & Poor’s 500 Market Index.
The biggest loss of the stock market in a day can be considered to be the crash of the meta platform. Facebook has announced that it will create a Metaverse to help shape the future of the Internet, but investors have pulled their money from Meta. Before the cases of harassment, fines and threats by regulators, misinformation and harassment, investors were investing in this tech company. These are the main reasons why Facebook has stunned investors with its social media giant status.
The biggest loss of the stock market in a day can be considered to be the crash of the meta platform. Facebook has announced that it will create a Metaverse to help shape the future of the Internet, but investors have pulled their money from Meta. Before the cases of harassment, fines and threats by regulators, misinformation and harassment, investors were investing in this tech company. These are the main reasons why Facebook has stunned investors with its social media giant status.
1. Telegram and TikTok
Facebook’s progress graph began to decline since the end of the last calendar year. The number of Facebook users started declining.
Meta executives specifically warned against increasing competition from video app TikTok as well as messaging services such as Telegram and Slack.
Meta invested in it, preferring the reel short-form video feature. It also focused on WhatsApp, Instagram and keeping its users in mind. Meta chose services that were more difficult to make money than the Facebook digital advertising machine.
2. Killed by Apple
A Meta executive told analysts that Facebook’s ability to target ads has been affected by the Apple update to the iPhone.
Apple’s iOS data collection made it possible for apps to request permissions prior to this update. Companies like Meta rely on this technology to target their ads.
Meta’s chief financial officer David Weiner said the iOS change will have a significant impact on Meta’s $10 billion annual business in 2022.
3. Coronation Effect
Meta was also affected by the larger market. Meta also noted supply chain issues, labor shortages and budget cuts as a result of the pandemic. This also affected Facebook ads.
4. Big Bets on the Metaverse
Mark Zuckerberg, CEO of Meta, sees the Metaverse as the future of Internet life. The name of the company was also changed to META. The Metaverse would be expensive and would take years to build. Investors who want to make quick profits in the market do not want to wait.
Meta said in a statement that the Reality Lab Unit, which works to merge the virtual and real worlds, has lost $10 billion.
5. Regulators should be closely monitored
The meta is expected to change so that it can compete against TikTok, which is very popular among the youth. However, regulators in the US and around the world want to limit its capability. In January, a US judge ruled that Facebook could be tried again in the US for harming competition through unilateral rights.
The case could have been postponed for several decades without the court’s decision. It is possible that WhatsApp or Instagram will be sold to regain competition.