2nd February 2022, as auspicious as it may sound, was not a great day for Mark Zuckerberg, CEO of Meta, as Facebook shares plummeted 23% to US$249.15.
This comes after a report of its first-ever quarterly decline of daily users globally, since its inception in 2004.
The massive drop, wiped out roughly US$200 billion in market value, which was the largest one-day drop ever recorded in US history.
Investors' Lost of Confidence
- Facebook's daily active users fell from 1.930 million to 1.929 million
- Recent rebrand to Meta not compelling enough to distract investors from Facebook's past crises and core problems
- Apple’s privacy changes to iOS making targeting ads to users more difficult causing advertisers to spend less
- In 2021, more than US$10 billion had been invested in Reality Labs, Facebook's virtual and augmented reality division, contributing to the quarter's profit decline
- Facebook-backed cryptocurrency Diem to wind down due to regulatory issues
Facebook's Hands Are Tied
- Increasing competition from TikTok causing Facebook to lose users to them
- Antitrust law is preventing Facebook from acquiring other companies
- Facebook's ad business severely affected by not being able to rely on Identifiers for Advertisers (IDFA) due to Apple's privacy changes on iOS
- The metaverse might take time to peak and reach its maturity, an element that might not be on Facebook's side
Despite the current setbacks, Mark Zuckerberg sounded optimistic, telling shareholders, “Last year was about putting a stake in the ground for where we are heading; this year is going to be about executing.”
