Meta stock plummets more than 25% after sharp drop in revenue

In October 2021, Facebook renamed its company name to Meta, emphasizing the fact that from then on, the company would focus primarily on building the metaverse and would not limit itself to being a social networking platform.

Shares of Facebook’s parent company, Meta, fell nearly 25 percent due to the recent quarterly report showing declining revenue and failing to meet earnings expectations.

Meta’s stock market crash

Meta’s stock price plunged and the company was almost on the verge of exiting the Top 20 U.S. stocks on the market. META’s shares fell nearly 25% on Thursday and are now trading at $97.94 today. It’s gotten so bad that it’s losing size to companies like Chevron and Procter & Gamble.

The quarterly report further led to Meta stock being downgraded by industry analysts like KeyBanc and Morgan Stanley. “We generally don’t like “overnight” rating changes because they can be reactive“, says Brian Nowak of Morgan Stanley. “But we think the latest META results and capital spending forecasts are thesis shifts and are likely to weigh on stocks for a period of time.“

Factors impacting the growth of Meta

There are many reasons impacting Facebook’s growth factors – from stiff competition from rivals like TikTok to the privacy issues the company has suffered from for years. Their recent foray into the metaverse has also been met with a lot of skepticism, with investors saying it was an experimental gamble that resulted in “huge and terrifying losses“. Thus, Mark Zuckerberg was urged by his investors to spend less on the metaverse project to reduce losses.

Mark Zuckerberg’s position remains unchanged

However, Mark Zuckerberg says for his part that the company would be making a mistake if it did not pay attention to the products that would ultimately lead the future.

“The internal indications I’ve seen suggest that we’re doing great work, and that we’re on the right track with these investments, so I think we should continue to invest heavily in these areas.”