- Meta shares plunged by more than 22%, to $100.79 on Thursday. This slashes over $65 billion from the company’s market capital.
- Market value of Facebook parent company had already fallen by half a trillion dollars this year.
- The 61% drop in Meta’s share prices this year has reduced Mark Zuckerberg’s net worth by 61%.
Wall Street is beating down Meta Platforms’ shares following the announcement of its second straight quarter revenue decline on Wednesday. The slide in share prices is Also, a portion of CEO Mark Zuckerberg’s rapidly shrinking fortune was taken.
Meta shares plunged to $97.36 on Thursday. This is 25% lower than Wednesday’s closing price. Meta’s market capization has dropped by $65 billion, or more than half of a trillion dollars in the past year.
Bank of America reduced Meta’s price target to $150 from $136 in a Thursday note. Analysts cited further deceleration of ad revenue and high-profile metaverse investments that seem permanent as well as uncertainty about the company’s transition into reels.
“On a total company basis, including metaverse investments, our valuation reflects a discount to S&P 500, given decelerating topline growth, increasing competition for user attention & advertising dollars, and large Metaverse investments pressuring earnings,” BofA maintained.
According to BofA, it’s possible for the stock price to see some upside if Meta gains strong momentum for Reels or Messaging monetization or if there is a TikTok ban. Yet, broader headwinds still remain.
Analysts noted that Meta’s topline would remain under pressure in the short-term as higher interest rates impact economic growth and online advertising demand.
The optimism of management about the lack of layoffs as well as insistence on Reality Labs’ future is not sufficient to offset disappointing guidance for next year and quarter, according to JPMorgan strategists.
“We remain neutral on META after we have printed. We are not able to Overweight on a credit that is otherwise extremely inexpensive to all its peers due the digital advertising environment and management’s lack of appetite for tightening belts,” JPMorgan wrote.
The bank also stated that Meta has made large investments in its metaverse division, but it is not yet clear what that will look like.
“[Zuckerberg]Neither did they offer any insight into the type of business it would be (hardware, software or ads).JPMorgan strategists agreed that this is the main question.
According to the, Zuckerberg has seen his wealth drop by 61% since Wednesday. Bloomberg Billionaires Index.A 13% stake in Meta is what makes up the majority of billionaires’ wealth.
Zuckerberg now has a net worth of $48.9billion. This means that he is still the 23rd most wealthy person in the entire world. According to the index.In 2022, he started with $125 billion in wealth. However, that fortune dwindled as a result of the slide in Meta’s share price. It has fallen 70% so far this Year.
On Wednesday, Meta — which owns social-networking platform Facebook — posted a 4% revenue decline in the third quarter of 2022 that followed its First ever revenueDrop of 0.9% in quarter prior. According to the tech giant, it also expects that its metaverse unit will continue losing money in 2023. Press release
“An increase of competition from China’s TikTok, and changes to Apple’s new privacy measures for iPhoneAlong with a slower pace of ad spending, the company’s sales are expected to be affected.” Thomas WestwaterAn analyst at DailyFX, an online trading platform.
He said that the metaverse is “the most powerful headwind” to Meta’s share price.
Investors are concerned about Zuckerberg’s incessant push into the metaverse. Altimeter Capital CEO Brad Gerstner Published an open letterFacebook and Meta’s board members on Monday called on the tech giants to concentrate on its core profit-generating businesses.
Meta said that Meta has no comment on volatility in stock prices.
