Facebook parent company Meta’s stock plunged more than 25% on Thursday, following fourth-quarter financial results that show the impact of Apple’s new privacy measures and a drop in people using Facebook on a daily basis.
The plummet could be the steepest collapse in the company’s history, following a 19% drop in July 2018 — and possibly the biggest one-day crash in stock market history. As of publishing, Meta’s value had dropped more than $230 billion.
Meta’s business took a big hit from privacy measures Apple rolled out last April, which require developers to ask people for permission to gather data and track them across apps and websites. The change has stymied Facebook, which uses the personal information of users to buttress its massive digital advertising operation. The company estimated the changes would cost it $10 billion this year.
Meta also said fewer people are using its platform. Daily active users dropped to 1.929 billion from the last quarter, a noteworthy loss for a company that has prioritized growth throughout its history. People are spending more time on Reels, Meta’s short-form video clone of TikTok, but it doesn’t generate as much revenue as more established products like Instagram Stories.
“Although our direction is clear, it seems that our path ahead is not quite perfectly defined,” Meta CEO Mark Zuckerberg said during an earnings call Wednesday.
Facebook spokesperson Ryan Moore said the company doesn’t comment on day-to-day stock movement.
Earlier this year, the company rebranded to Meta to emphasize its commitment to the so-called metaverse, which Zuckerberg has described as an immersive world with a mix of both digital and physical elements.
But while Meta pours money into its metaverse investment, Facebook investor-turned-critic Roger McNamee called the company’s virtual reality efforts a "train wreck." "FB has not demonstrated an ability to create new products,” he wrote in an email to BuzzFeed News on Thursday. “What they are really good at is controlling narrative. In retrospect, the best thing they did in Q4 was to get media to buy into the metaverse narrative.”
The stock plummet comes as the company faces a slew of challenges over antitrust regulation and misinformation. Last month, Zuckerberg received blowback for a secret 2018 deal he allegedly had personally signed off on that gave Facebook special privileges on Google’s ad platform, according to recently unredacted court documents.
Facebook has been worried about the dip in its business caused by the Apple changes for more than a year now. The policy announcement had previously sparked a war of words between Zuckerberg and Apple CEO Tim Cook.
"Apple may say that they're doing this to help people, but the moves clearly track their competitive interests," Zuckerberg said in an earnings call in January 2021 before Apple rolled out the changes. Cook has said the company believes that "users should have the choice over the data that is being collected about them and how it's used."