This article was published on February 3, 2022

Behind the numbers: Meta’s nightmare on Wall Street

Meta's set some undesired records


Behind the numbers: Meta’s nightmare on Wall Street
Thomas Macaulay
Story by

Thomas Macaulay

Writer at Neural by TNW Writer at Neural by TNW

If Meta thought a rebrand would put the nightmare of 2021 to bed, the company was in for a rude awakening on Thursday.

The firm was hit by the worst one-day slump in stock-market history. But that unwelcome landmark merely scratches the surface of Meta’s problems.

To truly capture the turmoil, we need to dig into the numbers that are spooking investors.

$200 billion: Meta’s loss in value

After Meta reported a rare decline in quarterly profit on Wednesday, shares in the company plummeted by more than 25%.

The one-day crash wiped over $200 billion off Meta’s valuation. That’s the biggest-ever collapse in market value for a US company.

Analysts attributed the meltdown to several factors: struggles to attract young users, competition from TikTok, Apple’s new privacy changes, and the metaverse.

1.929 billion: Facebook’s active users

Facebook’s daily active users (DAUs) dropped from 1.93 billion in the third quarter of 2021 to 1.929 billion in the fourth.

It’s a tiny dip on paper, but it marks a grim milestone: the app’s first-ever quarterly decline in DAUs.

User growth was already stalling in the US and Europe, but the biggest losses were recorded in Africa and Latin America. That’s a troubling sign for Facebook’s plans to expand beyond its main markets.

$10 billion: Meta’s loss on the metaverse

One factor behind Meta’s disappointing profits is its vast investment in the metaverse.

The company revealed on Wednesday that Reality Labs – its division for the metaverse – lost more than $10.19 billion in 2021.

This comes as no surprise to Mark Zuckerberg, however. The Facebook founder had planned to spend at least $10 billion on the metaverse in 2021 – and warned it wouldn’t be profitable “any time in the near future.”

Another $10 billion: Cost of Apple’s iOS changes to Meta

Meta loses wads of $10 billion like I lose socks in the wash. After blowing that sum on Reality Labs, the company expects to take a similar hit from Apple’s App Tracking Transparency.

The new feature lets iOS users stop apps from tracking them across the web. That’s bad news for Meta’s business, as it makes ad targeting less effective.

The company said on Wednesday that it will lose around — you guessed it — $10 billion in ad revenue this year as a result of the feature

$29 billion: The drop in Zuck’s wealth

Meta’s stock crash has burned a big hole in Mark Zuckerberg’s wallet. Around $29 billion was wiped off his net worth when the share price collapsed.

But save your tears, my dears. Despite this being among the biggest ever single-day drops in wealth, Zuckerberg remains one of the richest people of all time.

There’s also still life left in Zuckerberg’s baby.

Meta was expecting early losses from the metaverse investment. The company still has vast reserves of cash, a huge built-in user base, the Oculus VR headsets, and a name that gives the illusion of owning the metaverse

It might have been a dreadful week for Meta, but the company is a long way from dead.

Also tagged with