Facebook parent Meta loses $230 billion in market value after dire earnings, on track for biggest loss in stock-market history

• Facebook parent Meta plunged 26% at the open, with investors bitterly disappointed by its fourth-quarter earnings.
• The move wiped roughly $230 billion from Meta’s market capitalization, putting it on track for the biggest one-day valuation drop in US history.
• CEO Mark Zuckerberg said Facebook was facing increasing competition from rivals such as TikTok.

Meta, the company formerly known as Facebook, lost roughly $230 billion of market value in early trading Thursday after disappointing investors with fourth-quarter earnings that showed daily users falling for the first time ever.

It put the company on track for the biggest one-day wipeout of market value in US history, according to Bloomberg data.

Meta stock was 25.6% lower at $240.31 as of 9.34 a.m. ET, having closed at $323 the previous day. Meta released its results after Wednesday’s market close.

The drop slashed the company’s market capitalization – the value of all its shares combined – from $898.5 billion to $668.4 billion.

Meta CEO Mark Zuckerberg said Wednesday that earnings were likely to stay under pressure, not least due to competition from other social media apps such as TikTok.

“People have a lot of choices for how they want to spend their time, and apps like TikTok are growing very quickly,” Zuckerberg said.

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It was far from certain that the huge drop in Meta’s market cap would hold, however. 

Trading has been especially volatile recently, as investors have braced for the Federal Reserve to hike interest rates. Tech stocks in January saw some of their biggest one-day swings since the dotcom crash of 2000.

According to Bloomberg, the biggest one-day wipeout until now was suffered by Apple, which lost $180 billion of value in September 2020.

Meta’s profit came in at $10.3 billion in the fourth quarter, the tech giant said Wednesday, giving earnings per share of $3.67. Analysts polled by Bloomberg had expected EPS of $3.84.

Facebook’s daily active users fell to 1.93 billion, the first quarterly decline on record. Analysts had been expecting a 1.95 billion figure.

Worryingly for investors, Meta issued some tepid guidance for the first quarter. It expects revenue to come in at $27 billion to $29 billion, down from $33.67 billion in the fourth quarter and below market expectations.

Laura Hoy, equity analyst at broker Hargreaves Lansdown, said: “Investors were understandably troubled by the results, made worse by news that the current quarter was coming with a host of headwinds — not least of which being uncertainty about advertising budgets.”