Facebook parent company Meta is on pace to lose roughly $200 billion in market value as shares plummeted early Thursday.
The company’s shares dropped as much as 23% in pre-market trading which, if the losses hold, would lose Meta roughly $200 billion in market value.
The drop follows an underwhelming earnings report released late Wednesday that showed Facebook’s number of daily active users had declined for the first time in the company’s history. Meta chief executive Mark Zuckerberg said on the company’s earnings call Wednesday that competition from other social media apps was affecting the company’s growth and revenue.
“People have a lot of choices for how they want to spend their time and apps like TikTok are growing very quickly,” Zuckerberg said.
Meta also attributed its less-than-stellar earnings to privacy changes Apple rolled out in June 2021 that limit Facebook’s ability to track users across iOS apps and deliver personalized ads, a major source of Facebook’s revenue.
“With Apple’s iOS changes and new regulation in Europe, there’s a clear trend where less data is available to deliver personalized ads,” Zuckerberg said.
Meta’s declining share price also led to losses in other social media companies including Twitter, Pinterest and Snapchat parent Snap, according to Bloomberg.
“Confidence is being knocked because Meta is such a big player on the indices,” Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, told The Wall Street Journal. “Ultimately Meta is having to invest so heavily into [research and development] and preparing for the metaverse. That’s why it’s getting a thumbs-down from investors.”