Facebook dropped 26% is the most significant collapse in history
Facebook (FB) lost $200 billion in capitalization in one trading session. The stock sales are against the backdrop of disappointing forecasts for quarterly results. As a result, the shares of Facebook’s parent company, Meta Platforms, fell by 26.6% at the trading session opening on the NASDAQ stock exchange, to $237.7 per paper. The price has adjusted to $245.35.
The company’s quotes were last at this level on July 20, 2020. According to Bloomberg, the worst one-day collapse for any American company’s stock market history. Meta Platforms was losing more than $200 billion in capitalization at the moment — this is more than the value of 470 companies from the S&P 500 index.
The market value of Meta at the time of the previous close of trading on February 2 was about $900 billion. As a result, the company “found itself in the center of a perfect storm,” writes Trust Securities analyst Youssef Squali.
The October-December report, which became the first quarterly report after the rebranding and reorientation to the development of the Meta Platforms, reported that in January-March 2022, revenue growth could reach 3-11%, which would be the worst dynamics in its history.
A year earlier, revenue growth was 48%, Barron notes. As a result, the expected revenue for the first quarter will be from $27-29 billion, while analysts expected $30.15 billion. In addition, the company disclosed the financial results of the Reality Labs division, which invests in the metaverse and virtual reality: its operating losses amounted to $3.3 billion. The tech giant also faced insufficient monetization of the fast-growing short video Reels segment competing with the TikTok platform (owned by Bytedance).
A comparable, albeit more minor, collapse in the company’s quotes occurred in July 2018, when the shares fell by 19% amid the news that about 44% of young users in the United States aged 18 to 29 stopped using.
A survey by the Pew Research Center, the Facebook mobile app, due to the insecurity of personal data, led to a decrease in the company’s capitalization by about $ 120 billion.
