Facebook: unprecedented Meta collapse on the stock market after the first fall of active users of the social network

Unprecedented Meta Crash in the Stock Market Paul Roberts Visitors: 277 ★★★★★

Facebook is losing active users for the first time in its 18-year history.

Parent company Meta Networks (formerly known as Facebook) admitted that the number of daily active users fell to 1.929 million in the last quarter of 2021, compared with 1.93 billion in the previous quarter.

Although this may seem insignificant compared to the overall figure, this is the first fall of the social network founded in 2004 by Mark Zuckerberg.

The value of Meta shares fell by almost 27% on the New York Stock Exchange on Thursday. This is the biggest drop in one day that the company has experienced in the US.

As a result, Meta lost about $237 billion in market value.

Reasons?

CEO Mark Zuckerberg said the company's sales growth has been hit hard as audiences, especially younger users, have turned to competitors like TikTok and YouTube.

Meanwhile, advertisers are also cutting costs.

"We believe that competitive services have a negative impact on growth, especially in relation to a younger audience," said CFO Dave Wehner.
Facebook announced the name change to Meta in October last year. Zuckerberg wants the company to focus on developing the metaverse.

The power of TikTok

Meta, which owns the world's second-largest digital advertising platform after Google, also said it was affected by privacy changes in Apple's operating system.

Facebook instagrammer said these changes have made it more difficult to target and evaluate brand ads on Facebook and Instagram and could bring in "about $10 billion" this year.

Meta's total revenue, most of which comes from advertising sales, rose to $33.67 billion, slightly exceeding market forecasts.

It also forecasts revenue of $27 billion to $29 billion in the next quarter, which is lower than analysts expected.

In September , TikTok announced that it has 1 billion active users worldwide . The social network, which is characterized by short videos, belongs to the Chinese company ByteDance.

In January 2018, TikTok had 55 million users worldwide, and in December of the same year, their number grew to 271 million; and reached 507 million users a year later.

Instagram Facebook and Instagram channels, although Meta invests its own funds in videos to compete with TikTok, they earn less money from it than traditional Facebook and Instagram channels.

Zuckerberg said he is confident that the investment in video and virtual reality will pay off, as was the case with previous bets on mobile advertising and Instagram stories.

Instagram Facebook has actually launched a similar video feature known as Instagram Reels.

But, he noted, during the previous strategy changes, the company did not have to fight with a major competitor.

"The teams are working very well and the product is growing very fast," he said. "What's unique here is that TikTok is already such a big competitor and also continues to grow at a fairly rapid pace."


Is Meta in decline?

Analysis by James Clayton, North American Technology Reporter

Facebook has always been a growing platform.

Every quarter, its global indicators moved in the same direction.

However, growth in Europe and the United States has stalled in recent years, which has been masked by an increase in the number of users in other parts of the world.

Facebook is not as popular among young people as it used to be. As the company itself has admitted, TikTok damages its business.

But there are other reasons why investors are worried about Meta.

He changed his name because he wanted to focus on the metaverse. But Meta is still far from creating a metaverse, a dream.

Instead, he invests billions of dollars in attempts to create it, and all because Mark Zuckerberg believes that there is a demand for it, and this is a big risk.

Perhaps the answer to Meta's pressing problems will be buying TikTok? U.S. regulators would never allow this because of competition laws.

And many in Silicon Valley now consider Facebook a toxic brand. This is definitely not the best place to work, as it was ten years ago.

This makes it difficult to attract talent

Meta has serious problems ahead. And failures these days can only be the beginning.


Paul Roberts
Paul Roberts

Paul Roberts 51 years old Born in Edinburgh. Married. Studied at University of Oxford, Department of Public Policy and Social Work. Graduated in 1997. Works at Standard Life Aberdeen plc.

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