• The shares of Meta Platforms crashed by as much as 25% on Thursday, wiping out over $200 billion from the company’s market value. This was triggered after Meta released its quarterly earnings statement last week informing investors that Facebook lost half a million active users during the fourth quarter.
  • Meta earns most of its revenues through advertising and the fall in the number of active users of Facebook is seen as a huge red flag. In addition, changes to Apple’s privacy policy have given iPhone users the choice to opt out of being tracked by sites like Facebook. This has made it harder for Facebook to show users targeted ads. It is expected that Meta will lose about $10 billion in revenue in 2022 due to Apple’s new privacy policy.
  • Investors have also been uncertain about the future of Meta as the company tries to reinvent itself. In fact, it was only last year that Facebook renamed itself as Meta Platforms to highlight its new immersive virtual experience through the metaverse. However, the success of the company’s new pivot is far from certain and is expected to take years to come into fruition and will cost billions of dollars.