Other social media companies similarly pointed to macroeconomic factors impacting their advertising revenue. It expects most of that expense growth to be driven by its family of apps segment, followed by Reality Labs. Reality Labs lost $2.96 billion in the period compared with a loss of $1.83 billion in the first quarter of 2021.įacebook lowered its total expenses guidance for 2022 to somewhere between $87 billion and $92 billion, below its earlier estimate of $90 billion to $95 billion. In the family of apps business, net income dropped 13% from a year earlier to $11.48 billion. The remaining $695 million came from Reality Labs, the part of the company that's attempting to build products for the metaverse. Stocks futures for the Nasdaq fell as much as 2.4% on Thursday.Facebook changed its name to Meta in October, reflecting CEO Mark Zuckerberg's effort to push the company towards a future of working, playing and studying in a virtual world.įacebook's family of apps, including the core app, Instagram and WhatsApp, accounted for 97.5% of revenue in the quarter. Spotify has been beset by a row over Covid vaccination misinformation and also released disappointing results. Other social media stocks were also hit hard in pre-market trading on Thursday, including Twitter, Pinterest and Spotify. The so-called FAANG group of Facebook, Amazon, Apple, Netflix and Google's Alphabet has seen around $400 billion in market capitalization wiped off in the opening weeks of 2022 as cheaper segments of the markets become more attractive while central banks taper stimulus.
In the past week purchases of large-cap tech have skyrocketed while speculative assets have seen very little demand. Investors seem to be becoming highly selective after the sector's record-breaking run in recent months.Īccording to research firm Vanda, purchases from retail investors in late 2020 and early 2021 were focused on expensive tech, EVs and so-called "meme" stocks. The disappointment over Meta's earnings and the subsequent stock fall raised memories of the bursting tech bubble in 2000. Meta said about 3% of worldwide monthly active users in the fourth quarter consisted solely of violating accounts while duplicate accounts may have represented about 11% of usage. Meta reported a decline in daily active users from the previous quarter for the first time as competition with rivals like TikTok, the video sharing platform owned by China's ByteDance, heats up.
Infineon was also penalised by a conservative outlook. "The tech selloff spilled over to broader equity markets this morning and with the Fed preparing to raise interest rates, we could see more volatility going forward," he said.Įuropean technology heavyweights ASML, Infineon and SAP were among the shares weighing the most on the region's STOXX 600 equity benchmark, in what traders viewed as a kneejerk reaction to the Facebook tumble. "The downgrade in the earnings outlook by Meta and other companies took markets by surprise," said Kenneth Broux, a strategist at Societe Generale in London. NDX fell more than 8% in January, its worst monthly drop since the end of 2019. Federal Reserve to erode the industry's rich valuations following years of ultra-low interest rates. tech companies have come under mounting pressure in 2022 as investors expect policy tightening at the U.S. "Meta CEO Mark Zuckerberg may be keen to coax the world into an alternate reality, but disappointing fourth-quarter results were quick to burst his metaverse bubble," said Laura Hoy, an equity analyst at Hargreaves Lansdown.īig U.S. If the premarket losses hold, a decline of this size in Thursday's session would mark the company's worst one-day loss since its Wall Street debut in 2012.
Meta was set to lose a fifth of its market value, erasing about $200 billion. The huge drop, which comes before Amazon earnings later in the day, spilled over to Europe, where technology stocks posted some of the steepest declines and soured the mood across global financial markets in another busy day of central bank meetings. Shares in Facebook owner Meta fell 20% in US premarket trade today after the social media giant issued a dismal forecast, blaming Apple's privacy changes and increased competition.
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