Facebook parent Meta plunges 20% and $220 billion wiped off its market value as users abandon the site; now blames Apple and growing TikTok competition for all its woes
Facebook is in trouble and CEO Mark Zuckerberg knows it. The rebranding to metaverse might also not save the company from the external pressures the social giant now faces. For the first time ever, Facebook parent company Meta reported declining users causing Meta to lose 20% in market shares and wiping $200 billion off its market cap.
In the earnings call yesterday, Meta revealed 500,000 fewer daily log-ins and declining profits. Zuckerberg said Facebook users’ decline was partly due to the boom in popularity of the competitor platform TikTok. That’s not all. Meta also blamed the woes on a combination of other factors, including privacy changes to Apple’s iOS and economic challenges, for Wednesday’s decline in stock prices.
The company said the lower-than-expected growth on inflation as well as supply chain issues are impacting advertisers’ budgets. In a statement issued to CNBC, Facebook said:
‘On the impressions side, we expect continued headwinds from both increased competition for people’s time and a shift of engagement within our apps towards video surfaces like Reels, which monetize at lower rates than Feed and Stories,’
For the first time, Facebook’s global daily active users declined from the previous quarter to 1.929 billion from 1.930 billion. During the last three months of 2021, Facebook reported a nearly half-million drop in daily users, with only 1.93 billion users logging in each day.
The carnage also led to Zuckerberg losing his personal wealth. When the company’s stock fell Wednesday, it was reported that Zuckerberg lost more than $29 billion of his net worth. The $220 billion loss comes at a time of the company’s unexpectedly heavy spending on its Metaverse project.
In October of last year, Meta said it plans to invest $10 billion on its metaverse to reflect the company’s new vision. At the time, Meta said it plans to hire 10,000 people in the European Union to build a “metaverse.” Zuckerberg added that metaverse is a major investment for the company and plays a vital role for the company going forward.
Meanwhile, Facebook haters see this as good news. In a post, one Twitter user tweeted:
“Finally some good news.”
Finally some good news
Facebook loses users for the first time EVER: Shares plummet 20%, wiping $200BN off value of parent-firm Meta after it revealed 500,000 fewer daily log-ins and declining profits – Zuckerberg's personal wealth takes $29BN hithttps://t.co/nsDws084PV
— Remember Ottawa (@JackPosobiec) February 3, 2022
Some are also calling for Facebook accounts to be deleted. In 2020, Musk asked his followers to delete their Facebook accounts. Responding to a tweet from Sacha Baron Cohen about the need to regulate Facebook, Musk responded with the hashtag: “#DeleteFacebook It’s lame.”
#DeleteFacebook It’s lame
— Elon Musk (@elonmusk) February 8, 2020