Shares in Meta, formerly known as Facebook, saw a drastic decline last Thursday after the social media giant declared a profit decline, reporting a sharp increase in expenses and uneasy advertisement revenue growth.
Chairman Mark Zuckerberg reportedly blamed rival TikTok. However, the increased expenses have been attributed to Meta’s recent $10bn spend on Web3 Metaverse pivot development.
As of trading on Thursday February 4, the social media platform’s shares fell more than 26% to $237.76, slicing an estimated $230bn off the company’s overall value. For Meta, this is by the record, the largest single-day decline it's ever seen.
Rachel Jones, an analyst at Global Data, said: “Meta is sacrificing its core business model for its fascination with the metaverse.
“Betting big on the metaverse isn’t a bad thing – the technology is set to be huge and provide a multitude of opportunities – but it will take at least another decade to really get going.”
With Meta platforms currently at 237.09 (as of February 4, 4pm EST), a 12% decrease in last year’s comparison, it seems that Meta will suffer considerably given the strong demand the company saw in 2021.