Sign up for our daily newsletter for the latest financial news and trending topics. Many of the rules for beginning stock-market investors apply no matter how the market is doing, but some are especially important if you dip your toe in during… Before you decide to buy a stock like Facebook, you want to make sure your portfolio isn’t too heavily concentrated in technology stocks. This sector has had a good run recently, so it may represent a larger percentage of your portfolio than you think.
Apple now requires users to give permission for companies such as Meta to gather data about them as they browse across the web. Unsurprisingly, users have said no thanks and it has made its ad targeting less effective. The company, which released earnings under its new name for the first time with a new reporting structure, missed earnings estimates for the fourth quarter at $3.67 vs. $3.84 analysts were expecting, according to Refinitiv.
Stifel analyst Mark Kelley sought to calm investors, noting that Zuckerberg outlined not one but seven investment priorities for the company this year. He said he doesn’t think Meta’s initial goal of reaching 1 billion metaverse users is a stretch — and importantly, he believes only 40% would be gamers, signaling its broader appeal. At the same time, it invested more than $10 billion in CEO Mark Zuckerberg’s ambitious plan to transform Meta Platforms Inc. into a virtual reality — actually, make that “metaverse-based” — company. T-Mobile US Inc. shares are surging after posting better-than-expected earnings, and predicted strong results for the rest of the year.
But the sell-off has meant FB stock is valued at a price to sales multiple of 4.7x while Netflix is valued at less than three times forward sales. Comparatively, FB is trading at a price to earnings multiple of 18.6x while this ratio for NFLX stock is similar at 18.7x. Shares of FAANG stocks such as Netflix and Meta Platforms are trading significantly lower compared to all-time highs. The two companies have trailed the equity markets by a huge margin but could remain attractive to both contrarian and growth investors at current prices. Even being down for several hours or a day could be enough to shift some users toward competing services, a threat that investors are currently weighing as the company’s share price slides.
Why Facebook Stock Dropped Again Today
Shares of Qualcomm Inc. are sliding despite strong earnings and guidance for future earnings. The chip company says demand remains high for its chips for handsets and cars, with supply shortages improving amid ongoing bottlenecks. The Nasdaq was down 2.75% today; Meta’s drop was more than double that. As of Friday’s close, Netflix had a market cap of $99.2 billion, down from over $300 billion in November. Facebook did briefly join the trillion-dollar club last year but is now down to $532.6 billion. Sign Up NowGet this delivered to your inbox, and more info about our products and services.
Facebook stock has been on a tear in 2021, reaching a $1 trillion market cap in early July, though the share price has stalled in recent months with the market cap currently resting just south of $920 billion. Since Apple instituted the change, the majority of users have declined to allow Facebook to track their browsing, greatly diminishing the company’s ability to target advertisements. On Thursday, Meta Chief Financial Officer David Wehner told investors the company expects the changes to cost it $10 billion in advertising revenue in 2022.
Shares of Facebook parent Meta plunged Thursday after the company forecasted weaker-than-expected revenue growth in the next quarter. Before Thursday, the largest single-day decline in market value was recorded by Apple, which shrank by $180 billion in September 2020, according to Bloomberg News. Microsoft’s market cap shed $178 billion in March 2020, making it the biggest loss following Apple, the news company said. Zuckerberg, who holds 55% invast review of the voting shares of Meta, giving him de facto control of the company, saw his personal wealth fall by an estimated $24 billion as a result of Thursday’s market rout. The 27% decline in the company’s share value translated into a loss of more than $230 billion in market value, an utterly unprecedented one-day loss for a single firm. Aditya Raghunath is a financial journalist who writes about business, public equities, and personal finance.
Why is FB stock going down?
Shares of Facebook parent Meta plunged Thursday after the company forecasted weaker-than-expected revenue growth in the next quarter. The company blamed privacy changes to Apple's iOS and macroeconomic challenges weighing on advertiser budgets.
Facebook has lost over 45% of its value since then and is down more than 50% from its record two months earlier. The company said Apple’s iPhone privacy changes, which impact its ad-targeting and measuring, would result in a $10 billion revenue hit this year. It also said macroeconomic challenges like inflation and supply chain disruptions, are weighing on advertiser budgets.
Since CEO Mark Zuckerberg announced the companys name change and shift in focus, its stock has dropped by 42%
That’s the largest single-day decline for a company on record. There are a number of metrics that investors use when they research stocks to determine the health of a company relative to others in its sector and to the market as a whole. The P/E ratio compares a stock’s price to the earnings per share the company generates. The ratio tells investors how much they’re paying for each dollar of earnings.
How much money has Facebook stock lost?
$230 billion? Facebook's stock plunge brings big losses for Mark Zuckerberg, Meta – and maybe you. Shares of the social media giant were down more than 26% Thursday. The New York State Common Retirement Fund lost $470 million. The California Public Employees Retirement System lost $440 million.
“People have a lot of choices for how they want to spend their time, and apps like TikTok are growing very quickly, ” Zuckerberg said on a call with investors Wednesday. Every major U.S. stock index was down significantly on Thursday, with the Dow Jones Industrial Average falling by 1.45%, the S&P 500 down 2.44%, and the tech-heavy Nasdaq down 3.74%. Netflix stock is down 70% from record highs while Meta stock has fallen 41% from record prices.
Facebook lost daily users for the first time ever last quarter
In the recent past, both companies appeared to have unstoppable growth and impenetrable moats. Netflix was so embedded in American households with must-see original content that the company could periodically raise its monthly subscription cost and not miss a beat. And Facebook, with its billions of users and dominant ad-targeting engine, was accumulating envious amounts of online ad revenue.
Yahoo Finance Live’s Rachelle Akuffo, Seana Smith, and Dave Briggs look at several of today’s trending stocks. Facebook tends to make its users “angrier” through the widespread dissemination of riveting content. The U.S. Department of Laborreportedthat the number of Americans filing new claims for unemployment benefits dropped to 238,000 as of Jan. 29, a decrease of 23,000 from the previous week’s revised count. Interest rates for the second time in less than three months, moving the rate to .5%.
Meta Platforms, Inc
FB and its various offerings are also facing increased competition from TikTok and other apps. Meta’s diminished mobile advertising power caused Wall Street to dump the stock and its big, long-term bet on the metaverse is difficult to gauge. The huge downturn could, however, set up an attractive entry point for investors looking to buy a company that reaches 3.6 billion people a month. Think of the metaverse as the internet brought to life, or at least rendered in 3D. Zuckerberg has described it as a “virtual environment” in which you can immerse yourself instead of just staring at a screen. Theoretically, the metaverse would be a place where people can meet, work and play using virtual reality headsets, augmented reality glasses, smartphone apps or other devices.
You will be notified in advance of any changes in rate or terms. You may cancel your subscription at anytime by calling Customer Service. Instagram has deleterious effects upon the mental health of teenage girls trying to live up to a photo-edited version of reality online. “The Wall Street Journal” keeps airing Facebook’s dirty laundry, and the stock keeps falling as a result. Volatility profiles based on trailing-three-year calculations of the standard deviation of service investment returns. Yahoo Finance tech editor Dan Howley details how Meta has changed its Facebook feeds in an effort to compete with TikTok.
Shares of streaming giant Spotify also fall after disappointing subscriber outlook
At market close on Thursday, the stock formerly known as FB fell 6.43% for the day. META is currently trading at $184.00, a number approaching the stock’s all-time-low of $174.95 reached late April. the physician philosopher’s guide to personal finance The stock has been under pressure since its last earnings report in February, when the company missed user number expectations and warned of increased competition from video apps like TikTok.
Facebook has become the worst of the bad boys among Big Tech ever since Cambridge Analytica . The continuing placement of profits over people has led to public departures of key employees who have become concerned about the ethics of it all. fx choice review When it comes to Meta/Facebook, the company, and its users, says digital advertising expert Janna Greenberg, “things are complicated.” The College of Communication professor of the practice began her career in advertising in Silicon Valley.
Whether it can take market share from TikTok remains to be seen. Although quarterly earnings per share were slightly lower than analysts had predicted, revenue was substantially higher and the annual results were positive overall. The average number of active daily users fell by about half a million users, according to The Washington Post. Investors typically judge the value of a stock based on its price-to-earnings (P/E) ratio, which is determined by dividing the share price by the fraction of the company’s earnings represented by an individual share of stock. Last year, Apple changed the privacy setting on its iPhones and other devices, requiring apps, including Facebook, to get each user’s explicit permission to track their activity on the internet.
Facebook’s revenue jumped 33% year over year to $29 billion, driven by continued growth in its core digital ad business. Those gains, however, fell short of Wall Street’s expectations for revenue of nearly $29.6 billion. Yahoo Finance’s Ines Ferre joins the Live show to break down how stocks are moving in early trading. Since Meta took on its new name last fall, the company has been shifting resources and hiring engineers — including from competitors like Apple and Google — who can help Zuckerberg realize his vision. Meta is putting a lot of virtual eggs — and billions of dollars — into the metaverse basket, and Wall Street is pretty anxious about it.
The company’s core social media business, reported under its Family of Apps, made $32.79 billion in revenue in the quarter with operating income of $15.89 billion. That drop to 1.929 billion daily users from 1.93 billion the prior quarter is likely a reflection of Facebook’s increasing lack of relevance with young people. Meta doesn’t break out Instagram’s user numbers, but daily users across all of its apps barely nudged higher to 2.82, adding just 10 million users from the third quarter.
Those stories have flipped relatively quickly — with investors reassessing the companies’ prospects in the face of increased competition and a deteriorating macroeconomic environment. The tech market has plunged since its peak in November, and Netflix and Facebook have been hit particularly hard. The company blamed privacy changes to Apple’s iOS and macroeconomic challenges weighing on advertiser budgets.
That’s down from January 2021, when 18 rated it a “strong buy” and 30 rated it a “buy,” but analysts see Facebook’s current troubles as temporary. Their average price target is $353.91 — over 49% above the current price. While investors don’t have a crystal ball, they still base their trading decisions on what is likely to happen in the future, not what has happened in the past. The Dow slipped 518 points, or 1.5%, to close at 35,111 on Thursday, while the broad-based S&P 500-stock index lost 2.4% and the tech-heavy Nasdaq composite shed 3.7%. In addition to concerns about economic headwinds, the tech sector is facing a distinctly unfriendly regulatory environment in the U.S. Lawmakers in both parties have expressed their concern that big technology companies enjoy too much influence over areas like popular culture and political discourse but face too little accountability.
Investors are concerned that Facebook will find it difficult to navigate Apple’s new privacy restrictions, which have dented its ability to target its customers’ ads. Facebook offered somewhat muted guidance to account for these challenges. Management anticipates revenue of $31.5 billion to $34 billion in the fourth quarter, while analysts’ forecasts had called for $34.8 billion in sales.
Prior to that change, Facebook had made extensive use of tracking software to deliver targeted advertising to its users — something its advertising clients were willing to pay a significant premium for. Meta is pouring billions of dollars and tons of resources into the metaverse. The bet is that people will eventually live some of or much of their lives in a new digital world via avatars. The hope is they will then spend their attention and real money.