A year ago, before Facebook went meta, the social media company had a $1 trillion market cap, putting it in narrow range with a handful of U.S. tech giants.
Today the prospect looks very different. Meta has lost about two-thirds of its value since peaking in September 2021. The stock is trading at its lowest level since January 2019 and is about to wrap up its third quarter with double-digit percentage losses. Only four businesses in the S&P 500 have had a worse year.
Facebook’s business was based on network effects – users brought friends and family members who told their colleagues and invited their friends. Suddenly everyone gathered in one place. Advertisers followed, and the company’s profits – and they were plentiful – provided the capital to hire the best and brightest engineers to keep the circuit going.
Facebook CEO Zuckerberg is now the 20th richest person with a combined net worth of $55.3 billion, down from $70.2 billion year-to-date Monday, indicating a sharp drop in the stock price attributed to Meta.#News #Right now #Business #BusinessIntelligence pic.twitter.com/BykagNwaXS
— 4cards entertainment (@4CARDS_Ent) September 28, 2022
But in 2022, the cycle has reversed. With users bouncing and advertisers cutting back on spending, Meta is poised to report its second consecutive quarterly revenue drop.
Companies are removing the once-ubiquitous Facebook social login button from their websites. Recruitment is a new challenge, especially as founder and CEO Mark Zuckerberg spends much of his time evangelizing the metaverse, which may be the future of the company but accounts for virtually none of its short-term revenue and costs billions of dollars annually to build.
#$MetaPlatform
Share Price -60% YTD pic.twitter.com/jCNrTUEpjb– 💲bu 4️⃣ 4️⃣ #IStandWithLewisHamilton✌🏽 (@SibusisoSithebe) September 27, 2022
Zuckerberg said he hopes the Metaverse will “reach a billion people” and be “home to hundreds of billions of dollars in digital commerce” within the next decade. In June, he told CNBC’s Jim Cramer that by the end of the decade, the North Star aims to hit those numbers and create a “massive economy” around digital goods.
