Meta (FB) lost US$200 billion in market value after results

February 02, 2022 07:51 PM PST | By Sanjeeb Baruah

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Meta (FB) lost US$200 billion in market value after results — Image source: ESB Professional, Shutterstock.com

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Highlights

Meta shares fell over 20% in after-market hours, wiping off US$200 billion in market value.

Meta blamed Apple’s privacy changes and macroeconomic factors for the weak results.

In the earnings call, CEO Mark Zuckerberg acknowledged competition from rivals, like the short video app TikTok, impacted the business.

The shares of Meta Platforms Inc (FB) plummeted more than 20% in the after-market hours on Wednesday after the company said in an earnings call that it might lose US$10 billion due to Apple's privacy rules.

The California-based social media company reported the much-awaited fourth-quarter results after the regular session. Meta posted a weaker-than-expected forecast after missing Wall Street estimates.

It blamed Apple's privacy changes and macroeconomic issues for the weak results. CFO Dave Wehner told analysts that the iPhone privacy rules could result in losses of U$10 billion for the company in 2022.

Alphabet (GOOGL) shares were also down nearly 2% after posting record quarterly sales the day before.

Meta said Apple's privacy changes made it hard for brands to measure ads on Facebook and Instagram.

The after-hours fall in Meta shares wiped out US$200 billion in market value, Reuters reported. It was trading at US$249.05, down 22.89%, in the after-market.

Also Read: Sony Group’s (SNEJF) booming movie business lifts quarterly results

Source: Pixabay

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Meta faces increased competition

The company also faces increased competition from rival platforms like TikTok and YouTube. It expects slow revenue growth in the coming quarter.

Meta had warned of digital ad sales losses in the fourth quarter. Facebook's monthly active users were 2.91 billion in the fourth quarter, nearly the same as the previous quarter.

In the earnings call, CEO Mark Zuckerberg acknowledged competition from rivals, like the short video app TikTok, impacted the business. He added that the company would continue investing in Reels and virtual reality in 2022 as it builds the metaverse.

The company now forecast the first-quarter revenue between US$27 billion and US$29 billion.

Meta's total revenue rose to US$33.67 billion in the quarter from US$28.07 billion a year ago.

Its net loss from Reality Labs, the division heading the metaverse project, was US$10.2 billion in 2021, against a loss of US$6.6 billion a year ago. Reality Labs' revenue was about US$2.3 billion last year.

Zuckerberg had previously warned that its metaverse project would not be profitable any time soon.

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