Facebook Parent Meta Stock Plunges 24 Percent, Making Zuckerberg ‘Poorer’ by More Than $10 Billion

Meta, Facebook’s parent company, saw its potential StockPrice plunged more than 20% intraday on October 27, amid wider carnage among U.S. technology stocks as investors pulled back from the impact of soaring inflation and ad spending.

Meta shares were down 24 percent on Thursday. The stock traded at $100, an all-time low since 2016. The stock traded at $382 per share at its peak.

Meta CEO was shattered by the stock market plunge Mark Zuckerberg’s net worth down by more than $10 billion, according to a Bloomberg estimate.

Driving Meta’s slump was the company’s third-quarter Earnings reportEarnings per share fell to $1.89 versus $1.89 expected, but revenue exceeded expectations ($27.7billion versus $27.4billion expected), and the guidance for fourth quarter was less than expected.

Meta’s Reality Labs division, which lost more than $9 billion in the first three quarters, showed bigger than expected losses in the third quarter, $3.67 billion versus $3.09 billion expected.

During an earnings call, Zuckerberg stated to investors that Meta is facing several headwinds. “volatile macroeconomy, increasing competition, ads signal loss, and growing costs from our long-term investments.”

Mark Zuckerberg, Meta CEO, speaks at an event in New York City on October 25, 2019. (Drew Angerer/Getty Images)

Meta, a social media company that specializes in digital advertising, is experiencing a slowdown. Its shares are down as much at 60 percent annually. This is because businesses are cutting back on advertising spending amid rising inflation and recession fears.

Follow us on Twitter or Pinterest or Google News: Read the latest content, follow us and get notified when the new article is being published.
Shop Now

Zuckerberg, whose personal fortune plunged by around $11 billion in the company’s stock slump, said Meta is behind on where it hoped to be on revenue, but he struck a hopeful note on a fix for the future.

“I believe the tougher prioritization, discipline, and efficiency that we’re driving across the organization will help us navigate the current environment and emerge an even stronger company,”He said.

Over the past 13 months, the total dent to Zuckerberg’s total wealth amounts to more than $100 billion, according to the Bloomberg Billionaires Index. Zuckerberg was worth $142 billion at its peak in September 2021. Now, it is only $38.1 billion.

If Meta’s intraday losses hold at the closing bell, the company will have lost around $78 billion in market value.

Nigeria Meta Court Case
A car passes Facebook’s new Meta logo on a sign at the company headquarters in Menlo Park, Calif., on Oct. 28, 2021. (Tony Avelar/AP Photo)

The company’s results come a day after Google and Microsoft posted disappointing numbers, sparking a widespread sell-off in tech stocks.

Analysts stated that investors are worried because Meta is spending capital-intensive projects at a moment when the ad marketplace, a major source for revenue for the company is drying up, as businesses cut back on spending amid growing signs of economic decline.

Meta has projected that Reality Labs’ losses would grow further in 2023 and promised to “pace”Investing beyond that.

Bernstein analyst Mark Shmulik MarketWatchHis team was “incredibly frustrated to see expenses balloon with an almost total disregard for investor expectations.”

“Our old swim coach once crudely said, ‘The bad news is you suck, [and] the good news is you can only get better.’ There was some truth to those words, and perhaps the same holds true here,”He spoke to the outlet.

Bernstein reduced its Meta price target from $195 to $135. Meta stock has seen a total of 13 brokerages reduce their price targets, with JPMorgan dropping it to a Wall Street low at $115.

This report was contributed by Reuters

Tom Ozimek

Follow

Tom Ozimek has a wide background in journalism, marketing, communications, and adult education. Roy Peter Clark’s best writing advice is the best he has ever heard: ‘Hit your targets’ and ‘leave all the best for last.

Source link

Leave a Reply

Your email address will not be published. Required fields are marked *