200 billion in market value gone: The Facebook tremor

Status: 03.02.2022 8:15 p.m

Is the Facebook success story coming to an end? The social network hardly attracts new customers. Investors were shocked. As a result, the parent company Meta lost a quarter of its market value.

Facebook boss Mark Zuckerberg has lost his laughter – because today his company experienced what was probably the blackest day in its history. The shares of the parent company Meta slumped by 25 percent on the Nasdaq. It’s the biggest one-day loss for Facebook stocks since going public in 2012. Within a day, Meta’s stock market value vanished by more than 200 billion dollars.

With this, Facebook writes stock market history. Never before has a company lost so much money on the stock market in absolute terms in one day.

Meta causes a sell-off on the Nasdaq

In the wake of the Facebook earthquake, tech stocks in particular experienced a real sell-off. The Nasdaq 100 fell 2.6 percent in the first few hours of trading. The titles of other providers of Internet communication platforms were also lost. Snap fell by 21 percent, Pinterest by eight percent and short message service Twitter by five percent. Even “Big Techs” like Amazon recorded severe price losses.

Facebook has a TikTok problem. Mark Zuckerberg admitted that. “People have a lot of choices about how they want to spend their time – and apps like Tiktok are growing very quickly,” he said in a conference call. The 37-year-old announced that his platform would focus even more on short videos in the future.

Facebook has a growth problem

For the first time, the world’s largest online network hardly gained any new users in the past quarter. The number of daily active members even dropped by around one million. Facebook will hardly grow at all in the first quarter of the current year. The group only promised sales of 27 billion to 29 billion dollars. This means that, in the worst case, year-on-year sales will only increase by three percent. In the previous quarters, Facebook had spoiled investors with lavish double-digit growth rates during the corona pandemic.

Experts doubt the growth story of the Facebook group. Analyst Ross Sandler of British investment bank Barclays wonders whether management can save Facebook’s growth or whether Facebook is in decline.

TikTok and regulators hit Facebook

The group is coming under increasing pressure from competitors such as Tiktok, from Apple monitoring advertising campaigns on the Internet, from competition authorities and politicians and from public criticism of the handling of controversial content, says analyst Ingo Wermann from DZ Bank. The path taken into the “metaverse” is expensive – both in terms of employees and the technology and content. “Hard reality meets virtual reality,” he says.

Well-known tech analyst Douglas Anmuth of the US bank JPMorgan downgraded the Meta shares to “neutral” for the first time since Facebook’s IPO. With that, Facebook has lost one of its most important fans on Wall Street.


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