Facebook sees biggest one-day market value drop ever for US company
Consumer prices rose 7% in December, the most since 1982
Blue Line Capital President Bill Baruch discusses his outlook on the stock markets.
Meta Platforms, formerly Facebook, is the latest casualty tied to inflation with shares down over 20%, wiping out more than $200 billion in market cap and on pace to the largest single-day drop for any U.S. company, as tracked by Dow Jones Market Data group.
It also shaved over $20 billion off CEO Mark Zuckerberg's personal wealth.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| FB | NO DATA AVAILABLE | - | - | - |
"We're hearing from advertisers that macroeconomic challenges like cost inflation and supply chain disruptions are impacting advertiser budgets," the company disclosed in its fourth-quarter earnings release.
$219B+ in Facebook Market Value Erased
The selloff hit the Nasdaq Composite to the tune of 2.6%.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| I:COMP | NASDAQ COMPOSITE INDEX | 18972.420086 | +6.28 | +0.03% |
WHERE PRICES ARE HITTING AMERICANS THE HARDEST
In the fourth quarter, net income fell to $10.2 billion from $11.2 billion during the same period a year ago, or $3.67 versus $3.88 per share. Revenue rose to $33.6 billion from $28 billion a year ago.
Daily active users rose 5%, or 1.93 billion.
INFLATION SURGES 7% IN DECEMBER, HIGHEST IN 40 YEARS
Revenue for the first quarter will range between $27 billion and $29 billion, below the $30 billion or so analysts were expecting.
The company also cited forthcoming pressure tied to Apple's iOS update which will hurt revenue.
"We believe the impact of iOS overall as a headwind on our business in 2022 is on the order of $10 billion, so it's a pretty significant headwind for our business," said Facebook CFO Dave Wehner.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| AAPL | APPLE INC. | 228.52 | -0.48 | -0.21% |
Other social media stocks fell in sympathy including Twitter, Snapchat and Pinterest.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| TWTR | NO DATA AVAILABLE | - | - | - |
| SNAP | SNAP INC. | 10.64 | +0.04 | +0.38% |
| PINS | PINTEREST INC. | 29.31 | +0.08 | +0.27% |
(DREW ANGERER/POOL/AFP via Getty Images / Getty Images)
CEO Mark Zuckerberg described the quarter as "solid" and highlighted key priorities for 2022.
"I'm encouraged by the progress we made this past year in a number of important growth areas like Reels, commerce, and virtual reality, and we'll continue investing in these and other key priorities in 2022 as we work towards building the metaverse," he said in the earnings release.
Facebook ended the 2021-year dealing with a public relations crisis after whistle-blower Francis Haugen went public with allegations that the tech giant ignored questionable and harmful content to focus on profits, among other things. Facebook disputed many of her claims.
Haugen released a trove of documents related to her claims to multiple news organizations at the same time, including FOX Business.
Additionally, the company's ticker FB will change to META in the first half of the year while continuing its listing on the Nasdaq.