The collapse of Facebook is worth more than the rest of the NYSE companies
Strong declines on Wall Street. Thursday’s session broke a streak of four consecutive days of growth. The sale particularly affected technology companies after the unsatisfactory quarterly results of Meta Platforms, which owns Facebook. As CNN writes, the market capitalization of meta has fallen by more than the overall valuation of most publicly traded companies on the New York Stock Exchange. Mark Zuckerberg’s stake in the company has fallen by more than $30 billion, and he himself has fallen in the billionaire rating of Bloomberg.
The Dow Jones Industrial Average closed 1.45 percent at the close at 35,111.16 points.
The S&P 500 lost 2.44 percent at the end of the day. Its value was 4,477.43 points.
The Nasdaq Composite Index fell 3.74 percent. And closed the session at 13878.82 points.
Wall Street. The finish line with big drops
The tech sector entered 2022 with some of the worst sentiment since the dotcom crash more than two decades ago. Ross Mold, chief investment officer at AJ Bell, said the largest US tech brands continue to provide the answers the market is looking for in terms of better-than-expected financial results.
Facebook is the foundation of trust. It is a company that is owned by a very wide group of investors as a major part of the portfolio, so when it is going through tough times as it is now, it destroys confidence in the market as a whole. JJ Kinahan, chief market strategist at TD Ameritrade, said the key question now is whether these are meta-specific issues, or will they be passed on to other companies.
Meta platforms fell during Thursday’s session by more than 26%, reducing its market value in dollars by about 240 billion . This is the largest daily drop in the share price of this company. The former Facebook showed worse-than-expected earnings for the fourth quarter of 2021 and disappointing revenue forecasts for the first quarter of 2022.
Meta earnings per share came to $3.67, compared to $3.84 market expectation. The group’s revenue was $33.67 billion, and the market had expected it to reach $33.4 billion.
In the last quarter of 2021, Facebook lost almost half a million daily active users – their number decreased from 1.930 billion to 1.929 billion. This is the first drop in this indicator in the site’s 18-year history.
The number of Facebook users per month has remained relatively flat at 2.91 billion. Meta’s revenue in the last quarter of the year was estimated in the range of 27-29 billion dollars. While analysts had expected revenue of $30.15 billion, Refinitiv data shows.
The astonishing drop in value is a reminder of just how big the tech giant is. As the CNN television portal wrote, the market value of meta has fallen by an amount greater than the total valuation of most publicly traded companies.
Meta lowers profit expectations
Meta expects that in the first quarter of 2022, its revenue will be in the range of $27 billion to $29 billion. Analysts expected the company to generate $30.15 billion in revenue in the first three months of 2022.
Shares of other social media portals also fell – Snap lost 19 percent and Twitter 5.5 percent.
– Meta and other companies lowered their profit forecasts surprised the markets. The tech sell-off spread to other industries on Thursday, and as the Fed prepares to raise interest rates, we could see more volatility ahead, said Kenneth Brooks, strategist at Societe Generale in London.
Honeywell is down more than 7 percent. The company’s revenue in the last quarter was $8.66 billion, and the market estimated it at $8.73 billion
Spotify shares fell about 17 percent. The podcast service posted a weaker-than-expected growth forecast for the number of regular subscribers.
Zuckerberg falls into the Bloomberg rankings
Even before yesterday’s session closed, Facebook founder Mark Zuckerberg ranked seventh in the Bloomberg Billionaires Index. Now that his stake in the company has fallen to more than $30 billion – Zuckerberg has closed the top ten billionaires with a net worth of around $90 billion. Elon Musk takes the number one spot, with a $231 billion portfolio.
Main image source: unsplash
