Metaverse Stock Falls After Big Users Drop

Facebook and Instagram’s parent Metaverse stock fall more than 26% on 4th Jan. The collapse of stock price wiped out $240 billion from the market.

Facebook’s user growth dropped down in the recent quarter wiping out 26% of Meta’s stock. From $323.00 Meta’s share fell to $237.09 today with the loss of almost $85.91. This fall was recorded as the largest single-day drop in market value for any US company ever.

Project metaverse is in the early stage now because its profit is less than the money which is invested in the project. Metaverse, generated $877 million in fourth-quarter revenue but lost $3.3 billion

What trigerred Meta's Stock fall?

Meta said that the augmented and virtual reality business is generating revenue but is unprofitable now. On Wednesday, after an earnings report in which the company missed profit expectations. Meta generated revenue of $33.7 billion, beating analyst expectations of $33.4 billion in the fourth quarter. However, it earned $3.67 per share, falling short of the $3.84 per share which triggered Meta’s stock fall.

Other social media stocks also saw a large drop in pre-market trading on Thursday, including Twitter, Pinterest, and Spotify. Metaverse CEO Mark Zuckerberg’s net worth has fallen $35.9 billion so far this year, according to the Bloomberg index.

Apple's Privacy Policy

Apple introduced its new privacy policy last April two months before the third quarter began. It changed its iPhones software to require apps to ask users whether they want to be tracked or not, largely limiting the ability to gather data used for targeted ads.

Due to this policy, Meta was largely affected because Meta makes around 98 percent of its revenue from advertising and there are billion of iPhone users.

Facebook Users Drop

After reaching its peak Facebook saw global daily active users decline in 18 years’ history. Facebook reported a decrease of roughly 1 million daily active users from 1.930 billion to 1.929 billion in its previous quarter. In the last quarter after the Facebook app lost 1 million daily users in North America from where it makes its most money through advertising it also lost daily users of Facebook globally.

Reels vs Other short video platforms

Facebook is facing big competition from other apps such as Youtube shorts and TikTok. Instagram and Facebook users are mainly spending more time on the platform’s short video product – Reels. Reels don’t generate as much revenue as the company’s News Feed or Stories where people can post content that vanishes in 24 hours because Reels doesn’t include as many ads compared to News Feed or Stories.

Other short video platforms like Youtube shorts and TikTok are growing faster therefore Meta has shifted focus towards Reels to build a young generation audience. Meta is facing pressure because younger users are shifting towards new apps and moving from Meta’s News Feed which generates large revenue for Meta.

Metaverse Stock Falls After Big Users Drop

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