Meta shares recorded a loss of 13.4% last week, approaching the lowest level recorded during the Covid-19 pandemic.
Shares of Meta, the parent company of the Facebook and Instagram platform, fell, to close with losses that made it reach $146.29 yesterday, its lowest level since March 2020, after recording levels lower than that for a short period before regaining some recovery.
big drop
Meta has lost 61% of its value over the past 12 months, in what is the biggest drop in the shares of a major technology company, after it reached the fifth place among the largest US companies in the trillion-dollar corporate club for a short period last year, according to Market Watch data. It joined the Big 4 technology companies: Apple, Microsoft, Alphabet and Amazon.
However, Meta shares have fallen significantly this year, due to concerns about competitive dynamics in the market, and concerns about revenue.
Loss of more than 500 billion dollars
With this, Meta lost its $1 trillion market value by more than half, allowing many companies to jump ahead and outpace it.
And since the company officially changed its name to Meta last October, the news for the company has been almost all bad.
Apple’s iOS privacy update has made it more difficult for the company to target ads, and rival TikTok’s popularity on social media has drawn users and advertisers away from Facebook.
The economic slowdown has also had an impact on many companies retracting their spending on internet marketing.
Meta first disclosed the financials of its Reality Labs division in its fourth-quarter 2021 earnings report, in February of this year, according to CNBC.
The Reality Labs division reported large and growing losses that cost the company more than $10 billion in 2021 alone, and the division’s net loss from 2019 to 2021 was more than $21.3 billion against revenue of nearly $4 billion.
2021 losses are in line with Zuckerberg’s predictions last year, and losses are likely to increase this year, putting a strain on Meta’s overall profitability.
The company would have been expected to generate more than $56 billion in profit for the whole of last year, had it not been for its Reality Labs metaverse research division.
Mark Zuckerberg is lost
Commenting on this, one of the experts at Harvard University and the former CEO of the medical technology company Medtronic, Bill George, says that Mark Zuckerberg “continues to derail” Facebook, “he has lost his way,” as he described it.
“I think Facebook is not going to do very well with Zuckerberg staying in place,” George told CNBC Make It.
George points out that presidents who lose sight of their beliefs, values, and goals because of money, fame, or power are bound to fail.
After decades of researching why big companies go down, George says he sees many similarities to Zuckerberg and Meta today.
He likened George Zuckerberg to a bad leader who does not take responsibility for his decisions and blames others, for example, Meta lost in February more than $232 billion of its market value, which represents the largest one-day decline for any US stock in history.
Zuckerberg and his executives then blamed several factors, including privacy changes to Apple’s operating system that made it difficult to target ads to smartphone users, as well as increased competition from companies like TikTok.
These factors may have played a role, but the huge spending on research and development in the metaphysics world cannot be overlooked as a significant factor as well.