Meta Erases $250 Billion in Value, Biggest One-Day Wipeout in History

Meta logo. Image used for representational image.

(Photo Courtesy: Meta)

After the first quarterly earnings report of the newly christened Meta, shares plunged about 26 percent on Thursday, a crash of about $250 billion from the social media networking giant's market capitalisation.

As a result, Zuckerberg personally lost 29 billion (about 24 percent) of his net worth. At $84.8 billion, he slipped to No 12 in the Forbes real-time billionaires index, behind India's Mukesh Ambani and Gautam Adani.

Facebook lost daily users globally for the first time ever, and reported lower-than-expected ad growth.

A Shift in Focus

Meta said that it expected revenue growth to slow because users were spending less time on its more lucrative services, IANS reported.

Zuckerberg is investing heavily in its TikTok rival, Reels, which doesn't make the kind of money that older features such as the news feed and Stories make. He is also shifting focus towards the metaverse.

Meta lost about a million daily users globally and stagnated in the US and Canada, two of its most profitable markets.

It also admitted that Apple's changes (that require its apps to ask users for permission to track their activity and share it with other apps or websites) would cost it some $10 billion this year in ad revenue.

Meta expected first-quarter revenue between $27 billion and $29 billion. This is year-over-year growth between 3 and 11 percent, marking the slowest period of quarterly growth in the company's history.

It reported a $10.3 billion profit for the fourth quarter, below analyst expectations, and a small decline compared to last year.

In Hot Water

Meta, which owns Instagram, Facebook, and Whatsapp, has been involved in multiple controversies regarding privacy violations, and the spread of disinformation through echo-chambers.

Multiple media outlets have claimed that the company knew about the flaws with its algorithms and the harm they cause.It is also involved in antitrust investigations around the world.

Meta's virtual and augmented reality consumer business unit Reality Labs, that is at the heart of the metaverse efforts, posted a $3.3 billion loss in the fourth quarter of last year and $10 billion in the whole year.

However, Zuckerberg plans to keep investing billions of dollars till the metaverse reaches scale.

He also announced that the company is building what it says will be "the fastest AI supercomputer in the world when it’s fully built out in mid-2022."

(With inputs from Reuters and IANS)