Facebook owner Meta Platforms saw its market value drop by more than $230bn (£169bn) on Thursday, in a record daily loss for a US company.
Its shares fell 26.4% after quarterly figures disappointed investors. Meta also said that Facebook’s daily active users (DAUs) had declined for the first time in its 18-year history.
The drop in the company’s share price caused CEO Mark Zuckerberg’s net worth to drop by $31 billion, according to the Bloomberg Billionaires Index. The drop in Zuckerberg’s personal fortune was equivalent to Estonia’s annual gross domestic product.
Even after that drop, Zuckerberg has an estimated net worth of nearly $90 billion, meaning he remains one of the richest people in the world.
That came after Meta revealed that Facebook’s DAUs fell to 1.929 billion in the three months to the end of December, compared with 1.93 billion in the previous quarter.
It was the first time that this measure of activity in the world’s largest social network had been reversed. The Meta stock market crash came on the eve of the 18th anniversary of Facebook’s founding.
Meta also warned of slowing revenue growth in the face of competition from rival platforms including TikTok and YouTube, while advertisers were also cutting costs. Zuckerberg said the company’s sales growth took a hit as audiences, especially younger users, turned to rivals.
The firm forecast revenue of between $27 billion and $29 billion for the first quarter of this year, which was lower than what analysts had expected. Although the company has been investing in video services to compete with TikTok, owned by Chinese tech giant ByteDance, it makes less money from those offerings than from its traditional Facebook and Instagram feeds.
It is clear that Meta is facing a whirlwind of different problems. Last year, Apple introduced its app tracking transparency policy.
It allows people to choose whether or not they want to be tracked across the internet by companies, like Meta, which can then sell that information to advertisers.
That’s a big problem for Facebook, because finding information about you and selling it to advertisers is exactly how it makes money. Its quarterly results showed a drop in ad revenue, partly for this reason. Meta rivals like TikTok are also attracting younger audiences. And user growth has stagnated around the world. There are also bigger long-term problems.
Meta makes money from advertising. However, the company name has been changed to mark a concept, the Metaverse, something that doesn’t exist yet and won’t work for years.
Mark Zuckerberg is committed to spending tens of billions of dollars on the project, though evidence that people actually want to live their lives in virtual reality is scant. It all means that many investors are no longer friends.