In a significant downturn for Meta, the parent company of Facebook, its shares closed more than 26% lower after the company projected weaker-than-expected revenue growth for the next quarter. The adverse forecast was coupled with the acknowledgment that Meta is experiencing substantial impacts from Apple’s privacy changes, particularly the App Tracking Transparency policy introduced last year.
The policy empowers users to decide whether they want to be tracked across the internet by companies like Meta, which rely on user data for targeted advertising. This shift in privacy dynamics poses a substantial challenge for Facebook, as its revenue model heavily relies on collecting user information and selling it to advertisers.
Thursday’s stock drop marked the largest one-day decline for Meta, surpassing the 19% plunge witnessed in July 2018. The market cap of the company plummeted by over $230 billion, bringing it down to approximately $660 billion. This significant loss in market value also impacted Mark Zuckerberg’s personal wealth, causing a nearly $30 billion reduction. Despite this setback, Zuckerberg’s estimated net worth remains around $90 billion, still securing his position as one of the world’s wealthiest individuals.
The fourth-quarter earnings and user numbers for Facebook fell short of expectations, contributing to a perception in Silicon Valley that the social media giant is now considered a less attractive or even “poisonous” brand. This shift in perception could potentially complicate Meta’s ability to attract top talent, making it less appealing for prospective employees compared to its status a decade ago.
As Meta grapples with these challenges, the recent stock plunge could be indicative of more significant hurdles on the horizon, signaling a potentially transformative period for the company.
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