It’s clear that the rising tide is no longer lifting all boats. I would characterise a 10% decline as a small correction but it’s something investors ought to take seriously. Why?įT: “Bear in mind that the NASDAQ has doubled from the lows of March 2020, which is an unprecedented move by historical standards. We think there are some very real grounds for doubt and that puts a lot of uncertainty into the equation for the future growth of Facebook at this point.” Some tech stocks have been hard hit and others, like Google and Amazon, haven’t. As a team, we’re not convinced it’s going to work in the way Mark Zuckerberg is suggesting. So revenues are slowing materially while spending is pushing up costs – the result is a severe and much worse-than-expected decline in profitability.” What does the share price move say about investors’ views on the metaverse?ĪT: “I think it shows how sceptical investors are about the metaverse and the ability of a company like Facebook to migrate its business model to a virtual reality platform (which is essentially what the metaverse is). For example, it has allocated over $10 billion per year in spending to develop its metaverse - virtual and augmented reality - capabilities.

In many cases, Facebook will no longer be able to track how its users move around the internet and sell that data to third parties, like advertisers, who use this type of information to place targeted ads.”įT: “Meta is investing heavily to try to circumvent the privacy issues it faces and to improve its competitive position against rivals like TikTok. For the coming quarter, Q1 2022, Facebook has acknowledged that changes in privacy settings will hit its revenues hard. “They’re now using competitors like TikTok, a short-form video-sharing app, which Mark Zuckerberg, Meta’s CEO, acknowledges is a real threat to the outlook for Facebook and probably for Instagram too.”įT: “TikTok’s popularity is surging rapidly, particularly among the younger generations, as measured by app downloads and time spent on the platform.” What about the changes in privacy settings that have come into effect?ĪT: “This is another reason for the share price performance of Meta last week.

Research shows that only 27% of teenagers use Facebook every day, down from 94% in 2012. The number of daily active users fell in the last three months of 2021 for the first time ever.” Where are users going?ĪT: “The younger demographic, those aged 18-24 years old, are going elsewhere. We’re seeing a definite deterioration in engagement as people are using Facebook less. “As it turned out, the results were disappointing on a number of fronts and actually quite worrying.”Īlex Tedder, Head of Global Equities: “The results confirmed that Facebook is starting to slow down. What exactly happened at Meta that caused the record share price fall?įrank Thormann, Global Equities Fund Manager: “Expectations for Meta’s fourth quarter earnings results were very high, not least because its largest competitor Alphabet, Google’s parent company, reported really excellent financial results just a few days before. The path of monetary policy amid soaring inflation and the uncertain trajectory of the pandemic are complicating portfolio decisions now, and the size and frequency of the swings in tech shares are beginning to worry analysts.Last week saw Meta, Facebook's parent company, lose more than $230 billion of its market value, an all-time record one-day fall for any stock.

Investors still have plenty to be on edge about, with the weeks counting down before a widely expected Federal Reserve interest-rate hike. jumped the most in almost two years after the Google parent posted upbeat results, which came on the heels of solid earnings from Microsoft Corp. shares soared 14% Friday on strong cloud growth, in the biggest single-day gain in market capitalization in U.S. posted the worst one-day drop in market value in stock-market history, plunging it into value territory.īut it was hardly a train wreck for tech stocks this week: Inc. The zaniness of the past five days is hard to exaggerate: The Nasdaq 100 Index, which includes some of the world’s technology behemoths, had its best week since December even after Facebook parent Meta Platforms Inc. It was a week of polar extremes for Big Tech, which saw stomach-churning swings that ignited the wildest volatility since the pandemic shuttered the U.S.

Meta stock price