Facebook’s parent company Meta suffered a sharp pullback on the New York Stock Exchange on Thursday, falling 24% and potentially erasing a $200 billion valuation, unheard of for Mark Zuckerberg’s company in Facebook’s history. Also unheard of on Wall Street.
The social media giant, which lost subscribers in North America for the first time in its history, disappointed analysts by reporting lower fourth-quarter profits and slower growth prospects in the first quarter after the market closed on Wednesday.
At 4:15pm GMT, the Meta Platforms headline was down 24.47% at $243.97, dragging the Nasdaq (-1.90%) lower.
Even as the stock fell like a rock, Facebook’s market value — valued at $879 billion at the close the previous day — suffered its biggest loss in Wall Street history on Thursday, raking in at least $200 billion in a single session.
Gregori Volokhine, president of Meeschaert Financial Services, noted that “$200 billion exceeds the combined market capitalization of 452 companies in the S&P 500,” which has only 500 companies. It is also equivalent to the gross domestic product (GDP) of an entire country like New Zealand.
Facebook boss Mark Zuckerberg, whose fortune was estimated at $113 billion at the close on Wednesday, also suffered a severe amputation, according to SEC filings. The co-founder of the social network lost almost $28 billion.
Meta, which oversees Facebook, Instagram, WhatsApp and Messenger, saw its net profit fall in the fourth quarter and the number of users on its platform stagnated.
Facebook itself has lost a million daily users, unprecedented for a social network known for capturing new users in its 18-year history.
The network admitted to facing stiff competition from younger users of the ultra-popular short-video platform TikTok.
On revenue of $33.67 billion, Meta “only” generated a net profit of $10.3 billion in the fourth quarter, down 8% from last year.
“It’s a dark circle,” said Wedbush analyst Dan Ives.
For the first quarter, the group forecast the weakest growth in its history.
Facebook’s disappointing forecast comes as stock markets have been very nervous and volatile since the start of the year, with the U.S. central bank hinting at raising interest rates soon.
So-called growth tech stocks, which are very sensitive to interest rates eroding their future profits, have been adjusting since January.
Aside from Facebook, other Nasdaq stocks favored during the pandemic have also come under heavy market sanctions in recent weeks.
Such was the case with Netflix, which fell nearly 22% in a single session on Jan. 21, wiping almost $40 billion off its valuation after announcing disappointing subscriber growth forecasts.
Other investors see the slump as a good trading opportunity: “We don’t think the market reaction is justified, and we think Meta stock is an attractive investment opportunity right now,” judged Morningstar analyst Ali Mogharabi.