NEW YORK: Shares of Meta, parent company of Facebook, went into nosedive over 25 percent on Thursday—erasing over $230 billion in market value for its worst trading session in history.
The stock stood strong at $323 a share when the markets closed at 4pm EST, but collapsed to $249 just half an hour later, for a loss of almost 23 percent. In just the first 11 minutes of after-hours trading, $16 billion in Meta’s market cap had been wiped out.
What triggered the sell-off was Meta’s quarterly report showing lower revenue, earnings per share, and the numbers of daily and monthly active users than expected by investors.
Whereas investors expected around $30.15 billion, Facebook’s figures showed $27-$29 billion, CNBC reported, citing a Refinitiv survey of market analysts. According to the same source, earnings per share came in at $3.67, short of the expected $3.84.
The sharp drop in the company’s market capitalization, which now stands at around $670 billion, is on pace to be the biggest wipeout ever in U.S. market history, according to Bloomberg data.
The number of daily active users (DAU) stood at 1.93 billion, less than the expected 1.95 billion, while the monthly active users (MAU) also undershot the 2.95 billion expectation, ending up at 2.91 billion, according to Street Account.
Making matters worse, Meta reported that Facebook lost daily users for the first time in its history as business on its core platform slowed, and executives blamed increased competition from the likes of TikTok for its decline.
This is the first quarterly report since Zuckerberg announced his social media behemoth would be changing its name to Meta, to better represent its focus on the upcoming metaverse and encompass the existing Facebook, Instagram, and WhatsApp brands.
