Facebook suffered the biggest one-day drop in value of any company in Wall Street history as a dismal set of financial results prompted a brutal sell-off.
Shares in Meta, the recently rebranded parent company, fell by 26.4pc, knocking over $230bn (£169bn) off its value, the day after it revealed that growing competition from TikTok had sent Facebook’s user numbers falling for the first time.
The drop took $28.5bn off chief executive Mark Zuckerberg’s personal wealth, sending him tumbling down the rankings of the world’s richest people.
Meta’s fourth quarter results on Wednesday night revealed a sharp fall in profits due to the company’s heavy spending on “metaverse” technologies such as virtual reality.
It also said it expected revenues to grow by as little as 3pc in the first quarter of the year, a dramatic slowdown for a company that has never failed to produce double-digit growth.
Most concerning was a never-before-seen drop in Facebook’s daily user numbers, which declined by 1m to 1.929bn over three months.
Facebook has consistently grown since Mr Zuckerberg invented the social network in 2004 and its worldwide spread has made it one of the world’s most valuable companies.
The drop – which Mr Zuckerberg attributed partly to the rise of the Chinese video app TikTok, sent shockwaves across the social media industry, with shares in Twitter falling by 5.6pc.
Snap, the parent company of Snapchat, and Pinterest had also both declined, but soared again in extended trading after their results topped Wall Street predictions.
The Nasdaq composite index of US tech stocks fell by 3.7pc.
The $230bn knocked off Meta’s value is well above the $180bn drop in Apple’s market value in September 2020 amid a tech market sell-off, the previous record.
Meta executives blamed the user drop on younger users turning to apps such as TikTok, higher data costs in India, a key market, and the pandemic meaning many users joined earlier than they otherwise would have, leading to a recent shortfall.
“People have a lot of choices for how they want to spend their time, and apps like TikTok are growing very quickly,” Mr Zuckerberg told investors.
Wall Street analysts were unforgiving in their assessment of the company, with many slashing their valuations of the company and questioning its strategy.
