Facebook parent company Meta lost $238 billion in market cap yesterday as Facebook stocks fell by more than 26%. Meta’s loss became the biggest single-day drop in value for the US stock market.
Meta’s $238 Billion Loss Highest In a Single Day
Facebook parent Meta lost more than $238 billion in market capitalization last Thursday. This is the US stock market’s largest drop in value for a single day.
Previously, Apple held the record at $182 billion when its stocks crashed heavily in September 2020.
In fact, the seven biggest drops in value happened in the last two years and involved tech companies. These are Apple, Microsoft, Tesla, and Amazon.
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It coincided with the period where these companies also rose in value astronomically. Prior to 2020, Facebook also held the record at $119 billion in 2018. At that time, the company also announced forecast revenue below analyst estimates.
Facebook Announced It Lost Users Between 3rd and 4th Quarter
The social platform gave a dismal forecast last Wednesday. It also reported that for the first time in its18-year history. Specifically, Facebook lost a significant number of daily active users.
The company said it lost half a million daily active users in the last three months of 2021. Numbers fell from 1.93 billion daily log-ins to 1.929 billion.
However, the number of monthly users stayed flat at 2.91 billion. Growth across Meta’s other platforms such as WhatsApp, Messenger, and Instagram remained modest.
In addition, Facebook blamed Apple for its loss. The makers of the iPhone began implementing stricter privacy policies on user data. It also acknowledged the threat coming from short-form video platforms such as TikTok and YouTube.
CEO Mark Zuckerberg admitted that Facebook never dealt with a major rival during its previous strategy shifts.
Meta’s Investment in the Metaverse
Meanwhile, Meta’s drop in value comes as it prepares to shift its focus beyond its current businesses. Meta wants to focus on the metaverse, a virtual world that represents the next step in social platforms.
In the metaverse, users appear as cartoon forms of themselves. They can visit other metacharacters and attend virtual events sponsored by real-life companies.
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However, the development of the metaverse is still a long way off. And can consume a lot of resources along the way. Zuckerberg announced that Meta posted a net loss of $10 billion in 2021. This is attributable to Meta’s investment in the metaverse.
Zuckerberg’s Net Value Drops As Well
Meanwhile, CEO Mark Zuckerberg also saw his personal net worth drop nearly $30 billion the same time Meta shares tanked.
His net worth is now $84.3 billion, according to Forbes. The loss also meant that the 37-year old billionaire won’t be among the top ten richest people since 2015.
Watch the Arirang News video reporting that Meta shares plunge 26% overnight, wiping out US$ 230 billion:
What do you think of Facebook’s single-day record loss of $238 billion? Is this the start of a downward trend for the social media giant? Or, will it rebound nicely once something good comes up?
Tell us what you think. Share your thoughts below.