Facebook is Experiencing a Historic Decline in Users and Stock Price

Facebook’s parent company supported pulling a historic drop in the stock price and other tech stocks lower on Wall Street, which surprisingly ended a 4-day winning stroke in the market. Moreover, Meta Platform tumbled 26.4% and marked a massive one-day loss for a US-based company in history. The owner of Facebook lost at least $230 billion in market value. The other social media companies including Snap and Twitter also experienced a significant amount of decline.

A massive twist in the stock price of Meta can drop or increase broader market indexes because of its higher value. The S&P also dropped 2.4%, which marks a massive drop in a year. Nasdaq’s integrated loss was at 3.7% and marked its major drop since September 2020. The Dow Jones Industrial Average without including Meta Platforms dropped 1.5%.

The market indexes showed raw numbers as the Dow Jones decreased 518.17 points to 35,111.16, the Nasdaq fell 538.73 points, and the S&P dropped 111.94 points to 4,477.44.

A Major Loss for Mark Zuckerberg

Multiple reports have indicated that Facebook is experiencing significant numbers of declines in its users for the first time. However, Meta participated in this sudden decline of Facebook users. The stock crash of Facebook is giving major losses at around $230 billion, for Meta CEO Mark Zuckerberg.

The chief market strategist for LPL Financial, Ryan Detrick said it was undoubtedly all about Facebook. The earnings of Facebook silent and opened up the opportunities to take control.

The chief investment strategist at CFRA, Sam Stovall, said the market reaction seemed negative regarding the earnings of Facebook and massively lost value than expected revenue forecast. It motivated investors to expect more declines which were started in early January.

Why Facebook Users Dropped Rapidly?

Detrick also said it is only Facebook but generated many concerns. The company recently maintained a perfect balance in stocks. But negative news regarding Facebook moved it to go back the other way and gave a bigger weakness.

Hirsch added that Facebook has experienced much weaker numbers than expected because the guidance was poor. However, the metaverse build-out is expected to be more expensive and Facebook is losing its margin with the privacy restrictions of Apple.

Stovall also Added that 3 Elements are Essential to Keep Pressure on Stocks

The Fed is expected to increase its short-term interest rates by 4 or more times during the recent year by 0.25% each time. The recent forecast has generated a significant amount of growth in stocks, such as technology, to decrease since the higher interest rates made these stocks more expensive in the future.

The GDP forecasts for the first quarter have decreased significantly. It caused more concerns to investors that Fed could make strict measures against inflation because the US economy is moving too slowly.

The third element shows investors are in worry due to the similar disappointing results for other crucial stocks. It was because of the massive representation of Facebook within the S&P 500 and poor results in the 4th quarter.

He said that our 401 thousand might show a decline in the first quarter value but investors should realize the investment isn’t a short-term proposal. The current year is expected to be positive but the market could experience fluctuation. The midterm election, interest rates, and geopolitical events such as the tension between Ukraine and Russia could generate more concerns.