Shares were down 25.6 per cent shortly after the opening in New York, resulting in a roughly $200 billion hit to the company’s market value.
Facebook founder Mark Zuckerberg had some $20 billion in value wiped from his personal holding by the rout on Wall Street, according to filings on the company stock he owns.
At 21.45 IST, shares of Meta was trading 24.58 per cent lower at $245 on the Nasdaq.
Newly renamed Meta is investing heavily in its futuristic “metaverse” project, but for now, relies on advertising revenue for nearly all its income.
So when it posted sharply higher costs but gave a weak revenue forecast late Wednesday, investors got spooked.
This is by far the biggest collapse in market value for any US company. But there’s no certainty the losses will hold, especially given the recent volatility that’s whipped across technology shares.
Markets have swung wildly in recent weeks, with buy-the-dip traders sometimes storming in during the final hours of the trading day.
The sharp fall comes after the social media giant reported a rare decline in profit due to a sharp increase in expenses as it invests heavily in its transformation into a virtual reality-based company.
Previously, Facebook’s market cap had dropped $120 billion on July 26, 2018.
In addition, recent privacy changes by Apple make it harder for companies like Meta to track people for advertising purposes, which also puts pressure on the company’s revenue.
Meta also forecast revenue well below analysts’ expectations for the current quarter, due in part to growing competition from TikTok, the company said.
Meta Platforms took on its new name last fall to emphasize CEO Mark Zuckerberg’s focus on the metaverse. Since then, the company has been shifting resources and hiring engineers — including from competitors like Apple and Google — who can help realise his vision.
It expanded workforce by 23 per cent, ending the year with 71,970 employees, mostly in technical roles.
Meta, which also owns Instagram and WhatsApp, has noted that it faces fierce competition for young users from the likes of explosively growing short-form video platform TikTok.
Analysts expected 1.95 billion daily active users on Facebook, but Meta reported 1.93 billion — a key indicator of the growth trajectory for a company fueled by the people who choose to interact with its platforms.
On the financial side, Meta achieved a turnover of $33.67 billion, in line with its forecasts, but it made $10.3 billion in net profit in the fourth quarter, 8 per cent less than last year.
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