Latest News by Industry
• Shares fell by nearly 25%, bringing down Snap, Pinterest as well
• The company released earnings for Q4 on Wednesday after market hours
Shares of Facebook owner Meta Platforms Inc (NYSE: FB) plummeted more than 25% wiping out more than $200 billion after the company predicted weaker-than-expected revenue growth in the next quarter. It forecast revenue between $27 billion to $29 billion for the next quarter, which is lower than analysts’ expectations.
For the first time in 18 years, Facebook reported a drop in its daily active users (DAUs). The social media giant's parent company Meta said that DAUs fell to 1.929 billion in the quarter ended December, compared to 1.93 billion in the previous quarter.
The company released earnings under its new name for the first time with a new reporting structure. It missed earnings estimates for the fourth quarter at $3.67 as compared to the $3.84 that analysts were expecting. It narrowly beat analysts’ estimates regarding revenue growth at $33.67 billion vs. $33.4 billion estimated.
Challenges ahead
The company said Apple’s (NASDAQ: AAPL) iPhone privacy changes, which impact its ad-targeting and measuring, would result in a $10 billion revenue hit this year. It also said macroeconomic challenges like inflation and supply chain disruptions, are weighing on advertiser budgets.
The company is facing stiff competition from Chinese tech giant ByteDance’s video content sharing platform, TikTok. CEO Mark Zuckerberg said he was confident that the investments in video and virtual reality would pay off, as previous bets on mobile advertising and Instagram stories have.
Other social media stocks, including Snap Inc (NYSE: SNAP)and Pinterest (NYSE: PINS), were down Thursday following Facebook’s plunge.
(With inputs from CNBC)
Picture Credits: CNBC