Facebook shares plunged 14% in a week and fell more than 60% this year

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The troubles with the “Centre of the Metaverse” Meta appear to be far from over. After plunging 14% this week, shares of Facebook parent Meta are at their lowest point since the 2020 outbreak. Meta shares have fallen 61% over the past 12 months, the largest decline among major U.S. tech companies, and their overall decline was twice as large as the Nasdaq Composite’s decline over the same period.

If shares extend their current decline, Meta is on track to break below the January 2019 stage lows, when the Cambridge Analytica scandal hit consumer confidence in the social media company and sparked a series of heated congressional hearings.

In addition to external interference factors such as the Fed’s interest rate hike and the Russian-Ukrainian crisis, Meta’s continued pressure on operations is the main reason for investors to sell.

Meta’s business troubles have continued since it officially changed its name last October: A slowing economy has caused many companies to scale back online marketing spending; Apple’s iOS privacy update has made it harder for the company to target ads; competition from TikTok has made more of advertisers and users are starting to leave company platforms. In the company’s previous second-quarter report, it was the first time that revenue fell year-on-year, the decline was higher than market expectations, and the profit also fell sharply beyond expectations.

There is no inflection point in sight for this continued decline: the latest data from Morgan Stanley shows that the total time users spend on Meta sites fell 3% year-on-year in August, the second consecutive month of declines. The market originally expected that the company’s data would be “strategically reversed and rebounded in July and August.”

The continuous decline in various data also makes the market skeptical of Zuckerberg’s remarks that “it will become a Metaverse company within five years” and “will continue to increase the expenditure of the Metaverse project”. Investors are starting to demand more specific information from Meta management, where Metaverse plans to invest, and how cost reductions will be achieved between the Metaverse business and its core business.

Source: Wall Street News

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