On Wednesday, Facebook parent company Meta released a disappointing fourth-quarter earnings report. By Thursday, the company’s shares were down more than 26%. The more than $230 billion loss set the record as the biggest one-day market value drop for any U.S. company in history.
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In Wednesday’s earnings report, the social-media platform reported an earning of $3.67 per share while $3.84 was expected. Meta also forecasted first-quarter revenue in the range of $27 billion to $29 billion, while analysts were expecting $30.15 billion.
The company attributed a number of factors to its disappointing quarter, one of them being the privacy changes introduced by Apple last year. In a conference call, Meta CFO Dave Wehner told analysts that the impact of the privacy changes could be “in the order of $10 billion” for 2022.
The company noted that increased competition for people’s time and the shift to video platforms are other reasons for profit loss, as video platforms like Reels monetize at lower rates than Feed and Stories. Meta also wrote that macroeconomic challenges like supply-chain disruption are negatively impacting advertiser budgets.
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Facebook CEO Mark Zuckerberg is one of the biggest casualties of the drop as the largest individual shareholder in the company. As Meta’s share prices crashed, the CEO is estimated to have lost around $30 billion on Thursday.
Despite a report that painted a bleak picture for the social-media platform’s future, Zuckerberg reiterated the company’s focus on the metaverse.
“I’m encouraged by the progress we made this past year in a number of important growth areas like Reels, commerce, and virtual reality, and we’ll continue investing in these and other key priorities in 2022 as we work towards building the metaverse,” Zuckerberg said in the press release.
As of Friday morning, Meta Platforms was down 1.85% over a 24-hour period.
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