NEW YORK – Meta Platforms, the company behind Facebook, WhatsApp and Instagram, saw nearly a quarter of its market value evaporate on the New York Stock Exchange Thursday. At the opening bell, so many billions of dollars of market capitalization went up in smoke and the share price plummeted to its lowest level since 2016. Investors were shocked by the social media company’s quarterly report.
Meta recorded a new decline in quarterly revenue due to the decline in ad revenue. Advertisers have become much more reserved due to the deteriorating economic outlook. A further decline is also expected for the current quarter. In addition, Meta’s profit was halved, mainly due to higher costs.
The company continues to invest a lot of money in the metaverse. That dream project from CEO Mark Zuckerberg is a virtual world where people can do all kinds of businesses from their homes. The business of Reality Labs, managed by the project, has already suffered a loss of more than $ 9 billion this year and losses will increase further in 2023, according to the company.
Morgan Stanley analysts downgraded the stock’s rating in response to the company’s disappointing results and outlook. Facebook had already lost much of its market value earlier this year. In February, the group even lost 26% in one day.
Partly due to the new drop in Meta’s prices, the Nasdaq technology indicator lost 0.4% to 10,928 points in the first few minutes of trading on Thursday. Shortly after trading began, the Dow Jones Index rose 1.4% to 32,288 points. The broad S&P 500 rose 0.3% to 3840 points.
In addition to Meta, many other large American companies such as McDonald’s, Caterpillar and Ford have also achieved results. Investors also worked out the European Central Bank (ECB) decision to raise interest rates again by three-quarters of a percentage point. It was also announced prior to trading that the US economy grew again in the third quarter, after two consecutive quarters of contraction.
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