Meta Platforms’ intraday plunge ranks as the worst in stock market history, Facebook’s parent plunged 26% in U.S. trading Thursday on poorly reported results, wiping about US$252 billion off its market value.
Meta faces historic stock drop after Facebook’s growth stalls
This becomes the biggest collapse in market value for any U.S. company. However, there is no certainty that the losses will be sustained in the coming days, especially given the recent volatility that has affected technology stocks.
Despite that, analysts are gloomy in their assessments, noting that Meta faces stiff competition from rivals such as TikTok and that revenue was much lower than expected.
Michael Nathanson, an analyst at brokerage firm Moffett Nathanson, titled his note “Facebook: The Beginning of the End?”
“These declines are profound,” he wrote. The results “grab headlines and not in a good way.”
The size of Facebook’s collapse illustrates how tech companies have skyrocketed into giants with unprecedented market power, plus the drama that can ensue when they stumble.
“Many U.S. mega-caps are priced as growth stocks. They may suffer more in a rising yield environment, especially if growth becomes more questionable,” said Frederic Rollin, senior investment advisor at Pictet Asset Management.
Another way to illustrate the decline: the decline in Meta would be greater than the market value of more than 460 of the S&P 500 members.
Meta “is in the midst of a perfect storm,” wrote Youssef Squali, an analyst at Truist Securities.
Twitter Inc, Snap Inc, and Pinterest Inc, closed lower Thursday and dragged the Nasdaq index down 4.2%, its worst selloff since September 2020.
Meta’s market capitalization at Wednesday’s close was about $900 billion. The company is part of Faang’s original cohort of tech mega-caps, which includes Google parent Alphabet Inc. as well as Amazon.com Inc. and Apple Inc.
This is not the first time Meta’s stock has fallen sharply. In July 2018, the stock plummeted 19% due to a slowdown in user growth, resulting in about a $120 billion decline in market capitalization. At the time, it set the record for the largest one-day loss in value for a U.S.-listed company.