The huge drop, erasing over $200 billion from Meta’s market capitalization and around $29 billion from Chief Executive Officer Mark Zuckerberg’s net worth, spilled over to the broader technology sector and dragged the Nasdaq Composite Index lower.
New York: Shares of the company formerly known as Facebook saw a historic plunge on February 3, after it reported a rare profit decline due to a sharp rise in expenses, shaky ad revenue growth and fewer daily United States users on its flagship platform. Shares fell more than 26 percent, lopping off more than $230 billion of the company’s market capitalisation.
The huge drop, erasing over $200 billion from Meta’s market capitalization and around $29 billion from Chief Executive Officer Mark Zuckerberg’s net worth, spilled over to the broader technology sector and dragged the Nasdaq Composite Index lower. It was the biggest slide in market value for a U.S. public company, according to a Reuters analysis of Refinitiv data.
It marked the company’s worst one-day loss since its Wall Street debut in 2012.
Meta was a widely held stock by various investor groups, including hedge funds, according to recent data, leaving a number of funds potentially exposed by the wipe-out in its shares. Other institutional investors were also heavy owners.
It was also a popular stock for retail investors, who appeared to be enthusiastically buying the dip.
Meanwhile, a historic plunge in the stock price of Facebook’s parent company, Meta Platforms Inc., helped yank other tech stocks lower on Wall Street on February 3, abruptly ending a four-day winning streak for the market. The tech-focused NASDAQ gave up 3.7 percent, its biggest loss since September 2020. The S&P 500 fell 2.4 percent.
A weak revenue outlook for Meta helped drag the stocks of other social media companies including Twitter and Snap lower too.
