Meta’s share price, formerly that of Facebook, plunged on Thursday as markets opened, with the company seeing an estimated $250 billion in market value wiped off the board.
The social media giant was rebranded from Facebook to Meta in October 2021 as part of the company’s pivot to the metaverse to regain its appeal for younger users.
But Meta’s latest investor earnings call on Wednesday February 2 saw the company acknowledge slowed growth in advertising and further headwinds in late 2021, kickstarted by a fall in Facebook users in the last quarter of 2021.
Meta Platforms stock, trading as FB, fell by almost 22% overnight after reporting its lower than expected earnings results.
As the US stock market opens again on Friday morning, Meta’s price and FB stock could fall even further – as the owner of Messenger, Instagram and WhatsApp reckons with stiff competition from TikTok and slower advertising growth over the next year.
Here’s why Facebook’s price is down today, what Mark Zuckerberg said in Meta’s Q4 2021 earnings call and the latest share price for Meta stock today as the market opens.
What is Meta’s share price today?
After Meta stock closed at $323 per share on Wednesday night, Meta shares fell to 239.05 in a 26% fall on the previous 24 hours as of 9.37am EST and 2.37pm GMT on Thursday.
FB stock was down almost 28% on the past month and 30.69% on the last 6 months as of 9.40am EST Thursday, but this sank lower again on Friday morning as the stock market reopened.
Meta Platform stock closed at 237.76 on the NASDAQ on Thursday evening, but fell to $230 (£170) ten minutes after the market opened at 9.40am on Friday.
It has since rebounded, but only slightly – trading at 234.24 as of 2.56pm UK time and 10.56am EST.
This puts Meta’s trading value down by 22.11% on the last five days, 30% on the last month and 35% on the last six months.
It is currently trading at just over 100 points lower on its year to date – with its market cap declining from $879.19bn on Wednesday February 2 to $638.78 so far on Friday morning at 11am EST (3pm GMT).
The crash in FB stock has been accompanied by increased Google search for ‘buy Meta stock’, which Convertr.org found to have proliferated by 3000% in the UK on Thursday.
A Convertr.org spokesperson said:“There is a huge debate around whether Meta – formerly Facebook – is on its way out, with active users of its main app (a core growth target for investors) falling by a million last December, a statistic which triggered a huge crash in Meta’s share prices today when it was released.
"The enormous rise in people Googling how to buy Meta stock may indicate that many still have confidence in the tech company, which enjoyed high revenues of $33.7bn for the past three months, despite its drop in daily active users.
"However, with the major concerns around Facebook and privacy issues, as well as apps such as TikTok dominating the market, it may well be that Meta – despite its rebrand and name change – will see further decline in growth.”
Why is Meta’s price down today?
FB stock price crash comes as Meta’s latest earnings call with investors saw the company report a loss of approximately a million daily Facebook users in the US, as the number of Facebook users dropped from 1.93 billion daily to 1.92 billion in quarter four (Q4) 2021.
The decline in Facebook users is the first time the company has seen a drop in its daily active users in its 18 year history.
Along with other Big Tech companies currently facing increased competition and threats to their dominance, such as Netflix, Meta’s CEO Mark Zuckerberg made it clear that TikTok and the rise of rival social media companies is leading to a fall in Facebook’s younger users.
This is something which Meta hopes to combat by channelling more resources into short form video formats such as Reels on Instagram and its pivot to the metaverse, with more Meta virtual reality headsets and 3D social media avatars set to roll out this year.
But the company also saw less growth in 2021 across WhatsApp and Instagram.
Daily active users across its family of products increased only marginally from 2.81 billion in Q3 2021 to 2.82 billion in Q4 2021.
This contrasts heavily with the steady quarter-on-quarter increase of daily users on its platforms from quarters previously, with daily active people on Meta family products rising from 2.6 bn in the first quarter of last year to 2.72 bn in the second.
Net income in Q4 2021 was also down for Meta on Q4 2020, with slides from Meta’s Q4 2021 earnings presentation showing an almost $1 billion and 8% fall from $11.22bn in 2020 to $10.29bn in 2021.
Yet on the whole, Meta's fourth quarter revenue increased from $29bn on the previous quarter $28bn on Q4 2020.
What did Mark Zuckerberg say in Meta’s Q4 earnings call?
Mark Zuckerberg told investors in the company’s final quarter earnings call on Wednesday that the challenges facing the business stem from increased competition and its transition to focusing on short form video and monetisation of video content.
"People have a lot of choices for how they want to spend their time and apps like TikTok are growing very quickly,” Zuckerberg said.
“And this is why our focus on Reels is so important over the long-term.
“As is our work to make sure that our apps are the best services out there for young adults, which I spoke about on our last call.”
He added: “As a result of both competition and this shift to short-form video as well as our focus on serving young adults over optimizing overall engagement, we’re going to continue to see some pressure on impression growth in the near term.
“Now I’m confident that leaning harder into these trends is the right short-term tradeoff to make in order to get long-term gains.”
The CEO added that the company’s investment priorities over the next year would be concentrated on community messaging, short form video and developing its metaverse products such as social virtual reality platform Horizon.
Zuckerberg also announced that off the back of the success of Meta’s Quest 2 headset, Meta hopes to release a “high-end virtual reality headset” later this year.
Sheryl Sandberg, Chief Operating Officer at Meta, in part attributed the company’s slower advertising growth to the significant advertising tracking changes brought in by Apple on iOS devices, which allowed users to ‘ask app not to track’ when downloading and opening third-party apps.
“We were lapping a period of strong demand in 2020 that benefited from very strong growth in online commerce, which has since slowed,” Sandberg said.
"Q4 was also the first holiday season after Apple’s iOS changes, which have had an impact on businesses of all sizes – especially small businesses who rely on digital advertising to grow.
"This will continue to be a factor in 2022.”