Mark Zuckerberg's plan to dominate the metaverse is turning into a nightmare for everyone. And it's costing the real world serious cash: $618 billion to be exact.
Shares of S&P 500 member Meta Platforms, the company formerly known as Facebook, crashed nearly 25% Thursday to 97.94 following a dismal earnings report. The company, which is shifting toward money-losing virtual reality products and away from its social media gold mine, reported a quarterly profit that missed expectations by 11%.
After this latest leg down, more than $600 billion in market value has vanished since the company announced its new name nearly a year ago on Oct. 28, 2021. And the stock is down a crushing 69% since then — more than double the declines of other mega-cap tech stocks.
Meta Pain Getting Major
Meta's major wipeout is spreading pain throughout the S&P 500. Keep in mind this company was worth nearly $900 billion a year ago. It consistently ranked among the top 10, if not top 5, most important holdings in the S&P 500.
Now, it's valued at just $263 billion — marking one of the most colossal falls in S&P 500 history. Even the epic crash of Enron cost investors less ($75 billion). And Meta is now only the fifteenth largest holding in the S&P 500, behind Chevron and Johnson & Johnson.
And Meta's market value loss is rivaling those of Microsoft and Alphabet in the bear, despite those companies being much larger.
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Meta's Pain Hurts Everyone
There's no question who the biggest loser from Meta's move is: Zuckerberg himself.
Zuckerberg has watched as $76 billion of his Meta holdings have gone up in smoke since Oct. 28, 2021. He's still the single-largest holder of the stock. Zuckerberg owns nearly 13% of the company with 348 million shares.
But the losses are ballooning. Meta's largest owners are major mutual fund and ETF companies. It's a nearly 1% position in the S&P 500, but much larger in other widely held ETFs.
Meta is a key 17% piece of the Communications Services Select Sector SPDR ETF. And it's still the seventh largest position, accounting for 2.5%, in Invesco QQQ Trust.
The question is when will investors step in and contain the madness? Activist investors only own a small slice of the company, says S&P Global Market Intelligence. Each owns less than 0.2% of the company, including New York State Common Retirement Fund, D.E. Shaw and Davis Selected Advisors.
When will the Meta nightmare end?
Biggest Drops In Market Value Since Meta's New Name
| Company | Ticker | Stock % ch. | Market value loss since Meta name change ($ billion) |
|---|---|---|---|
| Microsoft | -30.1% | -$744.2 | |
| Alphabet | -36.8 | -$744.2 | |
| Meta Platforms | -69.1 | -$618.1 | |
| Amazon.com | -35.6 | -$617.4 | |
| Tesla | -37.4 | -$371.4 | |
| Nvidia | -47.2 | -$294.7 | |
| PayPal Holdings | -63.1 | -$177.3 | |
| Netflix | -56.0 | -$166.5 | |
| Adobe | -50.2 | -$156.0 |
Sources: IBD, S&P Global Market Intelligence from name change on Oct. 28, 2021 through Oct. 27, 2022
Follow Matt Krantz on Twitter @mattkrantz
