Facebook's parent company Meta(META) has been struggling with online advertising spending drops, competition from TikTok, and increasing uneasiness and skepticism about the future of the Metaverse.
In this environment, the company reported third-quarter earnings yesterday that spooked investors, evidenced by Meta's 24% drop in stock value the next morning, Oct. 27.
This caused Meta's market cap to fall to $274 billion, plunging 12 spots to be the 25th largest public company in the world.
"Facebook $META is now the 25th largest public company in the world, dropping 12 spots overnight," tweeted @StockMKTNewz.
Trading below $100 early in the morning, it was the lowest price the stock has seen in six years.
Meta had reported third-quarter revenue of $27.7 billion for its second quarterly drop in a row.
Worse, Meta signaled a gloomy outlook for the fourth quarter, projecting $30 billion to $32.5 billion in revenue. Wall Street was anticipating Q4 revenue in the high end of that range so the projected floor rattled some nerves.
Meta shares are down 61% since Jan. 1.
"While we continue to navigate some challenging dynamics--a volatile macroeconomy, increasing competition, ads signal loss, and growing costs from our long-term investments--I have to say that our product trends look better from what I see than some of the commentary I’ve seen suggests," CEO Mark Zuckerberg said on the earnings call.
"In 2023, we're going to focus our investments on a small number of high priority growth areas," he added. "So that means some teams will grow meaningfully, but most other teams will stay flat or shrink over the next year. In aggregate, we expect to end 2023 as either roughly the same size, or even a slightly smaller organization than we are today."
