Current:Home > InvestFacebook just had its worst day ever on Wall Street-DB Wealth Institute B2 Expert Reviews
Facebook just had its worst day ever on Wall Street
View Date:2024-12-23 22:59:53
Through all of the challenges Facebook has faced over the years, one thing has been constant: More and more people have kept signing up and logging on.
But that changed in the last three months of 2021, when the world's biggest social network lost daily users for the first time ever.
On Thursday, Facebook's parent company Meta had had its worst day ever on Wall Street, as disillusioned investors sliced its market value by 26% — or more than $250 billion.
The company's latest quarterly earnings report raised a number of red flags. CEO Mark Zuckerberg pointed to intense competition from the newest social media juggernaut, TikTok.
"People have a lot of choices for how they want to spend their time, and apps like TikTok are growing very quickly," he told investors on Wednesday. "The thing that is somewhat unique here is that TikTok is so big as a competitor already and also continues to grow at quite a fast rate."
The wildly popular Chinese-owned video app is swiping users and advertising dollars from Facebook and its sister app Instagram, threatening the heart of a business that generated $115 billion dollars in revenue last year.
Meta is scrambling to catch up with new features like Instagram Reels, a TikTok clone that the company is betting on to keep young users engaged.
But investors were spooked by Zuckerberg's acknowledgement that TikTok already has a clear, perhaps insurmountable, head start.
"The threat is so large that Facebook is being forced to change its products to replicate TikTok, because TikTok is what clearly consumers now want," said Rich Greenfield, an analyst at LightShed Partners. He said Meta's plunging share price reflected "the fear that TikTok has reached escape velocity."
TikTok is not the only problem weighing on Meta.
Apple recently changed its privacy settings on iPhones, making it harder for Meta to sell targeted ads. Meta said that could cost it $10 billion in lost sales this year.
"We're rebuilding a lot of our ads infrastructure so we can continue to grow and deliver high-quality personalized ads," Zuckerberg said.
And then there is Zuckerberg's ambition to become "a metaverse company."
Last fall, he renamed Facebook as Meta to signal its new focus on this future virtual world. But building it will cost a lot of money: Meta said it lost $10 billion last year on its Reality Labs division, which designs and builds the software and virtual reality hardware, such as the Quest 2, that will be used in the metaverse.
The ballooning costs resulted in a rare decline in quarterly profit to $10.3 billion.
On Wednesday's call, Zuckerberg admitted that the future is uncertain.
"This fully realized vision is still a ways off," Zuckerberg said. "And although the direction is clear, our path ahead is not perfectly defined."
But many shareholders are not sticking around to find out, said LightShed's Greenfield.
"Investors can handle bad news, investors can handle good news," he said. "What investors hate is lack of visibility."
Editor's note: Meta pays NPR to license NPR content.
veryGood! (694)
Related
- Patrick Mahomes Breaks Silence on Frustrating Robbery Amid Ongoing Investigation
- Britney Spears Reunites With Son Jayden Federline After His Move to Hawaii
- Video shows Starlink satellite that resembled fireball breaking up over the Southwest: Watch
- Karol G addresses backlash to '+57' lyric: 'I still have a lot to learn'
- Wicked's Ethan Slater Shares How Ariana Grande and Cynthia Erivo Set the Tone on Set
- Benny Blanco Reveals Selena Gomez's Rented Out Botanical Garden for Lavish Date Night
- Benny Blanco Reveals Selena Gomez's Rented Out Botanical Garden for Lavish Date Night
- Kyle Richards Shares an Amazing Bottega Dupe From Amazon Along With Her Favorite Fall Trends
- AP Top 25: Oregon remains No. 1 as Big Ten grabs 4 of top 5 spots; Georgia, Miami out of top 10
- Chris Pratt and Katherine Schwarzenegger welcome their first son together
Ranking
- Katherine Schwarzenegger Gives Birth, Welcomes Baby No. 3 With Chris Pratt
- Too Hot to Handle’s Francesca Farago Gives Birth, Welcomes Twins With Jesse Sullivan
- Wisconsin authorities believe kayaker staged his disappearance and fled to Europe
- New wildfires burn in US Northeast while bigger blazes rage out West
- Song Jae-lim, Moon Embracing the Sun Actor, Dead at 39
- Man accused of killing American tourist in Budapest, putting her body in suitcase: Police
- Stock market today: Asian shares mostly decline, shrugging off Wall Street’s overnight rally
- SNL's Chloe Fineman Says Rude Elon Musk Made Her Burst Into Tears as Show Host
Recommendation
-
25 monkeys caught but more still missing after escape from research facility in SC
-
John Robinson, former USC Trojans and Los Angeles Rams coach, dies at 89
-
Fantasy football Week 11: Trade value chart and rest of season rankings
-
Dwayne 'The Rock' Johnson weighs in on report that he would 'pee in a bottle' on set
-
Mike Tyson concedes the role of villain to young foe in 58-year-old’s fight with Jake Paul
-
Where you retire could affect your tax bill. Here's how.
-
Why was Jalen Ramsey traded? Dolphins CB facing former team on 'Monday Night Football'
-
School workers accused of giving special needs student with digestive issue hot Takis, other abuse