Since Facebook’s parent company became Metta, it has lost $650 billion – National | Globalnews.ca

It’s been exactly a year since Facebook’s parent company moved to Meta, and in that time the company has entered a financial freefall, analysts say.

Comparing Meta’s market capitalization at its announcement on 10/28/2021 to today, the company has shrunk by an astounding $650 billion.

Shares of Meta fell 24 percent to $97.94 on Thursday, sending its stock to its lowest level in nearly four years. The event cost Metal around $67 billion, adding to over half a trillion dollars in lost value in 2022 alone. Meta’s market capitalization is now $263 billion. They are rated lower than Home Depot and have been forced out of the top 20 companies.

Facebook CEO Mark Zuckerberg saw his own personal fortune drop by $11 billion after the stock market crash, according to Forbes, which dropped him from the 25th richest person in the world to the 29th richest on Thursday.

The incident echoes an earlier collapse in February that saw Meta lose about $200 billion in market value — the biggest loss ever recorded by a US company.

Since changing its name to Meta and investing heavily in creating the “metaverse,” a virtual reality world, Facebook’s parent company has struggled. From the beginning of 2022 until today, the company has lost 70 percent of its value.

This time last year, the day Facebook changed to Meta, the company’s market cap was just over $900 billion. Just weeks before it had reached its peak value of more than $1 trillion, joining an exclusive club that included Apple, Microsoft, Alphabet and Amazon. The company was riding high.

Now, a year later, Meta is jumping from crisis to crisis.

In February, when Meta’s stock fell 23 percent, Facebook’s daily active users fell for the first time, sending shockwaves through the tech giant.

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Later in July, Meta reported its first revenue decline, attributed to a drop in advertising spending as the economy began to drag. The competition for advertising revenue has also intensified with Meta’s biggest social media competitor, TikTok.

Another problem: Apple’s recent privacy changes make it harder to track companies like Meta for advertising purposes. Forbes reports that Apple’s changes cost Metal about $10 billion in advertising revenue.

All these factors together have slowed down Meta’s results and they also lead to this week, when Meta’s stock collapsed again.

Like the massive one-day loss seen on February 2nd, Meta’s stock market crash on Thursday was triggered by a weak earnings report that predicted a 50 percent drop in profits, and plans to maintain its high spending on building metaverses. to about 87 billion dollars, which will rise to about 100 billion dollars next year.

There appears to be a rift between Meta and its investors, who view the metaverse as a money pit and demand the company cut costs as the economy slows, while Zuckerberg invests in his virtual reality technology.

Meta’s virtual and augmented reality division, Reality Labs, has already spent $9.4 billion this year (through September 30) on creating metaverses, but it seems consumers aren’t all that interested.

Meta set a goal of 500,000 monthly active users for Horizon Worlds, its virtual reality platform, but according to a leaked report, the company achieved less than half of that, as reported by the Wall Street Journal. The report also found that most metaverse users did not return to the program after the first month.

“An empty world is a sad world,” one person remarked, according to the report.

It seems that if Meta wants to become a leader in the next generation of technology, they will have to work to convince both investors and consumers.

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