Facebook parent Meta lost more than $232 billion in value on 3 February 2022. That's the biggest one-day drop in value in the history of the U.S. stock market. Meta's plunge, based on a weaker-than-expected revenue forecast, topped the prior record set by Apple, when it lost $182 billion in market value in September 2020. The seven biggest drops in stock market history have all occurred in the last two years, as Apple, Microsoft, Tesla andAmazon have ballooned in valuation. Prior to 2020, the largest drop was from Facebook — a $119 billion decline in 2018. That also occurred after Facebook forecast revenue was below analyst estimates.
Meta's drop in value comes as the company is looking past its current businesses, such as Facebook, Instagram and WhatsApp, and toward the metaverse, a virtual world based on new technology. Chief Executive Officer Mark Zuckerberg announced Wednesday Meta had a net loss of $10 billion in 2021 attributable to Meta's investment in the metaverse.
The following is a chart of the largest one-day valuation drops in U.S. stock market history since July 2018:
Other reasons cited for the huge one-day drop include:
• Challenges to its core advertising business;
• Decline of Facebook activity by users in the U.S. and Canada; and
• Young people are less likely to be use Facebook
Meta’s lost market value is more than total market capitalisation of companies like Oracle and Cisco. Mark Zuckerberg’s personal loss was more than USD30 billion.
The wild swings on prices could be the early signs of a major market correction (or collapse) but Meta for now looks like a value stock then a growth stock!
Reference:
Facebook’s $232 billion fall sets record for largest one-day value drop in stock market history, Alex Sherman, CNBC, Feb 3, 2022 (https://www.cnbc.com)
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