Facebook ("Meta") down 25% in a day

[paxmao]

https://www.cnbc.com/2022/02/03/facebook-shares-plummet-22percent-after-reporting-weak-guidance.html

If I told you this was going to happen the day before you would have thought I was out of my mind, yet there it is. All it took for Meta (previous known as Facebook) to wipe out one quarter of its market value was to have less than expected growth in number of users. I never had much faith in Facebook particularly if you compare the trendy type of business with something like Amazon, Google or Microsoft who do not depend as much on staying fashionable.

Now, there is an opportunity if Libra or something similar comes out and their version of the metaverse works. Hint: They are going to have to reinvent themselves and face a fierce competition.

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[Charles-Tim]

According to the above link, Facebook stock plummeted 26%, I have not been following stocks but this is surprising.

This could be off-topic post, Facebook or Meta or what have you has pulled off from Diem or formerly called Libra project and sold it to Silvergate Capital Corporation

Mark Zuckerberg’s stablecoin project Diem officially shuts down
Vale Diem: How Facebook’s ambitious stablecoin project came to an end

Now, there is an opportunity if Libra or something similar comes out and their version of the metaverse works. Hint: They are going to have to reinvent themselves and face a fierce competition.

I totally agree to this if I get you correctly, Meta will not even only be for Facebook, life is competition.

Also off-topic post. About this Meta, I have seen signs of self-centeredness (never mind, I could be wrong), changing its name to Meta to create Metaverse.

[batang_bitcoin]

Now, there is an opportunity if Libra or something similar comes out and their version of the metaverse works. Hint: They are going to have to reinvent themselves and face a fierce competition.

AFAIK, they still got the Meta-metaverse project but about Libra, as linked above it's no longer going to pursue. This dump that has happened to Meta can be compared to bitcoin and those that have been talking drivel about bitcoin for being volatile, welcome to the reality in the stocks.
And with this news[1], there goes the Amazon enjoying their highest gain, breaking Apple's old record of $181-B gain in a day.
[1] Amazon surges with record $190 billion gain in value

[The Sceptical Chymist]

That's a pretty big drop in price, but if you look at Facebook's 10-year price chart it really doesn't seem so bad--especially since the stock will probably recover in no time:



I'm not even sure why single day performance of any stock is newsworthy or why in a market like today's where pretty much every stock is overvalued everyone is looking for explanations.  Honestly, I'd say the S&P and NASDAQ are both due for a 26% one-day drop.  This has been the longest bull market in stocks ever if I'm not mistaken.  I remember when it started, too, right after that massive crash and subsequent recovery in 2009.  I'm sure there are a lot of younger members here who weren't old enough to care about something like that, so that's one hell of a sustained bull market!

But these kinds of markets never last forever, not in stocks, not in crypto, not in any market.  And with a company like Facebook, which hasn't been around as long as other companies with massive market caps, volatility like what we saw on Thursday is kind of to be expected.

[RickDeckard]

~

May I add a bit of information regarding this drop - it mostly boils down to two (huge) factors (that I'm aware of):

• Apple recent privacy changes[1] - Facebook business model is all around advertising and sell you what you need / want. If they are no longer able to track you - which was something that Apple implemented by allowing their users to select if they want to be tracked or not[2];
• For the first time ever, Facebook monthly active users remained flat and the daily active users decreased in the time period between Q3 and Q4[3]. Since Facebook wants to grow and attract new users whenever it can (again, to fuel their business model), investors saw this as perhaps a warning that Facebook may not grown as expected in the upcoming times.

I'm a bit skeptic regarding the recent project that Meta has entered - the so called metaverse - and how it will pay out in the future. They already spent $10 billion[4] on it and I'm unsure how they wider audience will embrace this kind of technology. I guess it remains to be seen...

PS: This drop in price is also considered the biggest wipeout in US corporate history - In one single day $240 billion[5] simply were erased from the company stock value...
[1]https://www.nytimes.com/2022/02/03/technology/apple-privacy-changes-meta.html
[2]https://www.nytimes.com/2021/04/26/technology/personaltech/apple-app-tracking-transparency.html
[3]https://techcrunch.com/2022/02/02/facebook-isnt-growing-anymore/
[4]https://www.nytimes.com/2022/02/02/technology/meta-facebook-earnings-metaverse.html
[5]https://www.businessinsider.com/meta-q4-earnings-largest-ever-one-day-wipeout-190-billion-2022-2

[davis196]

I think that Facebook has come to a point,after which it's going to fade away slowly.
How many people around the world have a Facebook account?A few billion?There's no room for growth and Zuckerberg realizes that his company will have to focus on other projects,in order to stay relevant.
The Facebook stock was pretty overvalued and such 25% dump was pretty much expected.
I don't think that Zuckerberg is going to get worried about the stock price dump.
I'm not a big fan of this metaverse thing,but I'm sure that it's going to get really hyped in the upcoming years.

[mk4]

I'm a bit skeptic regarding the recent project that Meta has entered - the so called metaverse - and how it will pay out in the future. They already spent $10 billion[4] on it and I'm unsure how they wider audience will embrace this kind of technology. I guess it remains to be seen...

While it's definitely a mixture of multiple things, I'm guessing that the reason for the huge drop was mostly this metaverse thing. Institutional investors like predictable growth, whereas this metaverse bet brought a lot of uncertainty on how much revenues the company will have in the future.

[hatshepsut93]

• For the first time ever, Facebook monthly active users remained flat and the daily active users decreased in the time period between Q3 and Q4[3]. Since Facebook wants to grow and attract new users whenever it can (again, to fuel their business model), investors saw this as perhaps a warning that Facebook may not grown as expected in the upcoming times.

It's the same thing that happened with Netflix - the stock was priced with an assumption that the user growth will hit certain targets, it failed so the stock crashed. Facebook knew this is going to happen, probably years ago, which is a large part of the reason behind their recent rebranding. Facebook userbase has been growing older and older, what started as a site for college students turned into a site for middle-aged and old people, and there's nothing Facebook can do to get the younger generations back. The much-hyped metaverse is also a part of their plan to diversify their userbase.

[o_e_l_e_o]

Facebook userbase has been growing older and older, what started as a site for college students turned into a site for middle-aged and old people, and there's nothing Facebook can do to get the younger generations back.

I fully appreciate I'm not exactly in the right demographic here, but it seems the trend now is for "instant content" on platforms like SnapChat and TikTok. The people I do know with Facebook accounts only use them to find local businesses or sell things on the marketplace, and no one actually cares about posting content on it anymore. Hopefully this is an ongoing trend and Facebook continues to lose users. The sooner it fades in to irrelevance the better for everyone on the planet.

It's also revealing as to just how much Facebook thrives on spying on you and selling your data when a simple privacy change from Apple can have such a massive effect on their share price. Make no mistake - Facebook aren't a tech company; they are a data mining company.

[Haunebu]

This will hurt Meta in the short-term, but it most probably won't hurt it in the long-term based on its historical performance. They have been trying to reinvent themselves again and again in order to get rid of their anti-privacy image which clearly isn't working yet.

Personally, I was never a Meta addict since I am not obsessed with social media and I don't really care much about this site to be honest.

[Similificator]

Just by seeing how facebook and IG trust on trends and all, they are bound to be overtaken sooner or later. Just by doing a bit of searching you will be able to find out that there are a lot of people that has stopped using facebook and Instagram and same goes for stock holders. Just so happened that the downtrend triggered the ALREADY existing fear factor. Big stock holders aren't dumb so to not see a huge plummet coming, and so the domino effect took place. It's not beyond recovery though with proper marketing, it's just that it won't be as easy as before when facebook was on top.

[kryptqnick]

I remember this news, and it's a very valuable lesson for crypto users: no matter how big the market valuation is (or, in case of a crypto, its market capitalization), the price can drop significantly over panic selling, and no amount of institutional investors can fix it. And it happened over something as stupid as lower growth than expected! So it wasn't even anything major, and even the revenue was there. The price hasn't recovered, by the way, and actually continues falling. It's now -32% from a month ago, and -34% from 6 months ago. Bitcoin, in comparison, is doing way better.

[mindrust]

https://www.cnbc.com/2022/02/03/facebook-shares-plummet-22percent-after-reporting-weak-guidance.html

If I told you this was going to happen the day before you would have thought I was out of my mind, yet there it is. All it took for Meta (previous known as Facebook) to wipe out one quarter of its market value was to have less than expected growth in number of users. I never had much faith in Facebook particularly if you compare the trendy type of business with something like Amazon, Google or Microsoft who do not depend as much on staying fashionable.

Now, there is an opportunity if Libra or something similar comes out and their version of the metaverse works. Hint: They are going to have to reinvent themselves and face a fierce competition.

FB lost users for the first time and they heavily invested in the future of META which don't look like a good bet to me. All I see is a dead company which refuses to acknowledge its status. Companies rise and fall all the time. People cheered up a lot when Myspace died and FB took over... Guess what, FB is not invincible neither. Something else is killing FB. (Tiktok?) Paypal is also dying and leaving lots of sorry af bagholders behind.

There are too many of those overvalued companies in the markets. One down, many left.

[Fortify]

https://www.cnbc.com/2022/02/03/facebook-shares-plummet-22percent-after-reporting-weak-guidance.html

If I told you this was going to happen the day before you would have thought I was out of my mind, yet there it is. All it took for Meta (previous known as Facebook) to wipe out one quarter of its market value was to have less than expected growth in number of users. I never had much faith in Facebook particularly if you compare the trendy type of business with something like Amazon, Google or Microsoft who do not depend as much on staying fashionable.

Now, there is an opportunity if Libra or something similar comes out and their version of the metaverse works. Hint: They are going to have to reinvent themselves and face a fierce competition.

There is a lot of air built into the share price of these so-called "FAANG" companies, but it's very easy for them to deflate the second growth starts to slow or tumble. People are buying such companies with the hope that they continue to grow at 10-20%, which would help make the sky high valuations more palatable in a year or two. It's unsurprising to see such a reaction, but Facebook seems to have a few other problems going on - Apple adding restrictions recently will put a dent in the mobile advertising revenue and there is a lot of bad press about Facebook & Mark Zuckerburg recently, hence the name change to "Meta". They are also trying to pivot into this metaverse thing, which could drain a lot of money and nobody is quite sure how it will pan out, an all round recipe for disaster really.

[Findingnemo]

https://www.cnbc.com/2022/02/03/facebook-shares-plummet-22percent-after-reporting-weak-guidance.html

If I told you this was going to happen the day before you would have thought I was out of my mind, yet there it is. All it took for Meta (previous known as Facebook) to wipe out one quarter of its market value was to have less than expected growth in number of users. I never had much faith in Facebook particularly if you compare the trendy type of business with something like Amazon, Google or Microsoft who do not depend as much on staying fashionable.

Now, there is an opportunity if Libra or something similar comes out and their version of the metaverse works. Hint: They are going to have to reinvent themselves and face a fierce competition.

Facebook is going to be the next Nokia? Or atleast that is what people compared when this incident happened and probably they are right too. Also Facebook blamed Apple company for their advertisement revenue loss still we can't deny thw fact people are losing interest on Facebook and probably Facebook os surviving with WhatsApp and Instagram.

[mk4]

Facebook is going to be the next Nokia?

Are we forgetting that billions of people worldwide are still using Meta Platforms' products lol? They literally just had a single bad quarter and people are already calling for their obsolescence lmao this can't be serious.

[PX-Z]

Facebook userbase has been growing older and older, what started as a site for college students turned into a site for middle-aged and old people, and there's nothing Facebook can do to get the younger generations back.

Would be glad to include such statistics for a particular period of time bout this coz there are lots of younger people here in my country uses facebook more than any social media websites and lesser percent for older ages.

Edit: Found this from statista^[1], 25-34 seems not an older age to me.

[1] https://www.statista.com/statistics/376128/facebook-global-user-age-distribution/

[mu_enrico]

Investors were not impressed with the "metaverse" thing that brings nothing than a childish dream. The experience wasn't good, the graphics suck, just a bit better than minecraft. This VR thing will not be mainstream, as long as the device still using a small TV in front of the user's eyes and the environment isn't fully 3D. Probably 20 years from now, we may have the technology to do proper VR. Investors just don't want to wait that long. Moreover, the FB et al. advertisement revenue isn't doing well because of recession.

[Lucius]

Interestingly, no one wrote that FB failed or died, which is written for Bitcoin in the past two weeks intensified, and in the past 10 years with more or less intensity. When an investor loses 25% overnight on a stock then we pretend it is part of a normal investment, when he loses 10% on Bitcoin then he is a fool who fell into the Ponzi scheme.

For me personally, that company is almost worthless, but someone from the US intelligence community once said that it is the greatest tool for gathering information voluntarily - something like "we used to force people to tell us something, today they do it quite voluntarily". I wonder how Cuckeberg felt when he woke up in the morning and discovered that his personal shares were worth as much as $32 billion less than the day before

[RickDeckard]

Facebook userbase has been growing older and older, what started as a site for college students turned into a site for middle-aged and old people, and there's nothing Facebook can do to get the younger generations back.

Would be glad to include such statistics for a particular period of time bout this coz there are lots of younger people here in my country uses facebook more than any social media websites and lesser percent for older ages.

Edit: Found this from statista^[1], 25-34 seems not an older age to me.

[1] https://www.statista.com/statistics/376128/facebook-global-user-age-distribution/

While it doesn't show the age groups that constitute their Daily Active People (DAP) indicator, here's an interesting side from their latest Q4 report[1]:




Do note that these numbers are only regarding Facebook and do not include other products of Meta (Instagram, WhatsApp, Messenger, Oculus...). A good article that explains why Facebook is considered a high-growth company can be seen here[2] but, in sum, anything that shows that Facebook isn't growing as expected is bound to generate a market behavior such as the one we've just seen...
[1]https://s21.q4cdn.com/399680738/files/doc_financials/2021/q4/Q4-2021_Earnings-Presentation-Final.pdf
[2]https://medium.com/@10xre/facebook-the-story-of-a-high-growth-company-b8ad6f0793d6