• Meta changed the name of its company and lost over $237 million in market capitalization just one day.
• Facebook (NASDAQ) has surpassed Apple’s previous record of $182 Billion in one day, which was also broken in September 2020.
• Facebook crashed on Wednesday, after reporting that it would report lower earnings than forecast for its first quarter.

Meta, Facebook’s parent company, reported a large loss Thursday. It said it expected lower-than-expected results for the first quarter. It suffered a $237 billion market loss during Thursday’s session.

This represents the greatest drop for any company on the US stock markets. Meta’s record surpasses that of Apple in September 2020, when it suffered a $182,000-million loss as its share price plummeted.

Facebook shares fell about 26% during trading on Thursday, CNBC reported, reducing the company’s market capitalization to about $660 billion. The company’s reported earnings for the fourth quarter fell short of expectations.

Refinitiv reported that earnings earned were $3.67, compared to the $3.84 anticipated. Refinitiv reported that revenue was up for the quarter, with $33.67 billion in sales instead of $33.4 billion.

Refinitiv observed that its first-quarter revenue estimate of $27 to $29 billion was below what analysts expected at $30.15 billion.

Facebook suffers a second strong decline

Facebook’s second-ever crash has occurred in the past three years. The company lost $119 billion market value in 2018, This was exactly why it happened. According to the company, revenue was expected to be lower than analyst estimates.

The company has also been dragging serious image problems after being accused of favoring Joe Biden’s candidacy and blocking Donald Trump for the benefit of the then Democratic candidate.

Frances Haugen was a Facebook ex-employe who accused Facebook in a hearing in October 2021 before the US Senate of causing harm to children and fostering division throughout the world. She also claimed that Facebook failed to filter certain content which undermined American democracy.

There have been major falls in stock markets since 2020, including millionaire losses by other technology companies like Apple (NASDAQ), Microsoft(NASDAQ:), and Amazon (NASDAQ.). Paradoxally, the companies were able to rebound and today Apple holds the title of the biggest market capitalization.

Bet towards the Metaverse

The fall of Facebook – Meta in the US stock market coincides with the change in strategy of the company that is exploring new forms of business in addition to its Facebook, Instagram and WhatsApp platforms.

Mark Zucherberg, Chief Executive has taken a bold bet that many consider audacious. His Meta business is now geared toward the metaverse. This virtual world offers great growth opportunities, but it has not yet been built.

It is betting on the future of these virtual places that are defended and criticized by both supporters and opponents. The metaverse is home to the virtual real estate industry, considered by critics to be an innovative Ponzi scheme. It is, however, viewed by others as the future.

Zuckerberg stated Wednesday that the company’s investment in the metaverse generated a net loss of about $10 billion last year.

The Flipside

• Zuckerberg said the company’s drop in revenue is a consequence of privacy measures taken by Apple’s iOS and macroeconomic challenges that are affecting advertisers’ budgets.

Why you should care

• Facebook’s crash on Thursday dragged down other social media stocks on the stock market. Snap (NYSE) dropped 18% and Pinterest (NYSE) lost 5% while Twitter (NYSE) shares fell just over 4 percent.
• Facebook still boasts 1.929 million users despite losing around 1,000,000 profiles in 2021. Is this a sign that Facebook has ceased growing?

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