Jakarta, CNBC Indonesia – The share price of the parent company of Facebook and Instagram, Meta Platform, fell significantly.
The share price of the Meta Platform, which was previously known as Facebook, made by Mark Zuckerberg, fell 20% at the pre-opening and continued to be corrected by 26%.
The market capitalization value of Meta’s shares which fell by more than 20% in that trade was triggered by several factors.
The first is the financial performance that did not meet expectations in the fourth quarter of 2021. The decline in Meta’s business performance was caused by increasingly fierce competition.
Launching Reuters, Meta reported a decrease in the daily activity of its users in the last quarter of last year.
Meanwhile, its competitor’s active users, TikTok, a subsidiary of ByteDance China, continued to experience a sharp increase.
In a short time the market cap of Meta’s shares has disappeared by more than US$ 230 billion or equivalent to Rp. 3,307 trillion at the current rupiah exchange rate.
This decrease caused Mark Zuckerberg’s wealth in the Bloomberg Billionaire Index to drop drastically to US$ 30 billion or equivalent to Rp 431 trillion.
The massive sell-off in Meta shares also made US technology stocks fall too. Market participants began to associate this incident with the Tech Bubble phenomenon two decades ago.
Recently, Tech stocks in the US have been in a bad mood. For Meta shares only year to date already corrected 27%.
The trigger is none other than the plan of the Fed (US central bank) to raise the benchmark interest rate.
It should be noted that technology stocks are very sensitive to changes in monetary policy.
An increase in interest rates will tend to hamper the growth strategy that has been applied to technology companies.
At a time when Meta stocks fell, there were some people who made big profits. They are short sellers. Reuters reported that when Meta shares fell, short sellers were expected to make a gain of US$2.14 billion, or the equivalent of almost Rp. 30 trillion.
CNBC INDONESIA RESEARCH TEAM
(trp/trp)
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