Home WORLD AMERICA Brutal correction for Facebook’s parent company on Wall Street

Brutal correction for Facebook’s parent company on Wall Street

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The social media giant, which has lost users in North America for the first time in its history, reported post-closing on Wednesday lower profit in the fourth quarter and an outlook for slower growth in the first, which has greatly disappointed analysts.

As of 11:15 a.m. EDT, Meta Platforms stock tumbled 24.47% to $243.97, dragging the NASDAQ index (-1.90%) into its fall.

As the stock price plummeted like a rock, Facebook’s capitalization – valued at $879 billion at the close the previous day – suffered a phenomenal loss on Thursday, the largest in Wall Street history, melting at least $200 billion in one session.

billion dollars is more than the combined capitalization of 452S&P companies500″,”text”:”200billion dollars is more than the combined capitalization of 452S&P500 companies”}}”>$200 billion is more than the combined capitalization of 452 S&P 500 companies, which has only 500, as its name suggests, noted Gregori Volokhine, president of Meeschaert Financial Services. It is also the equivalent of the Gross Domestic Product (GDP) of an entire country like New Zealand.

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Facebook boss Mark Zuckerberg’s fortune estimated at $113 billion as of Wednesday’s stock market close, company documents show Securities and Exchange Commission (SEC), also suffered a severe amputation. The co-founder of the social network lost virtually almost 28 billion dollars.

Mark Zuckerberg in a jacket and tie.

Facebook boss Mark Zuckerberg.

Photo: Associated Press

Meta, which oversees Facebook, Instagram, WhatsApp and Messenger, saw its net profit decline in the fourth quarter and the number of users of its platforms stagnate.

Facebook itself has lost a million daily users, which is unprecedented for the social network, which has always known, in 18 years of existence, to capture new users.

The network admitted to facing fierce competition from the ultra-popular short video platform TikTok, on the side of young users.

On a turnover of 33.67 billion dollars, Meta only generated than 10.3 billion dollars of net profit in the fourth quarter, 8% less than last year. It’s a quarter in the shape of a black eyesummarized Dan Ives, analyst for Wedbush.

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Disappointing projections

And for the first quarter, the group forecasts the weakest growth in its history.

Facebook’s disappointing projections come as the stock market has been very nervous and volatile since the start of the year, which saw the US central bank signaling that it would soon raise interest rates.

So-called growth technology stocks, which are very sensitive to interest rates which eat away at their future profits, have suffered a correction since January.

Apart from Facebook, other fetish NASDAQ stocks, favored during the pandemic, have been violently sanctioned in recent weeks by the market.

This is the case of Netflix, which lost almost 22% in one session on January 21, virtually wiping out $40 billion in valuation after announcing a disappointing subscriber growth forecast.

Other investors saw the plunge as an opportunity for a bargain: we don’t think the market reaction is warranted and we believe Meta’s stock is now an attractive investment opportunityjudged Ali Mogharabi, an analyst for Morningstar.

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