The crash of Meta Platform Inc.’s stock on Thursday ranks as the worst in the history of the stock market in the world.
The parent company of Facebook‘s share price plunged by 22% in the early morning trading in the U.S. after the announcement of poor results. This has put Meta on track to lose $195 billion market capitalization, which is the most significant erosion of the market value of any U.S. company.
However, it is not sure that the losses will hold as the market has been volatile in technology stocks in recent weeks. Markets swing wildly, with traders who buy on dips becoming active in the final trading hours.
The bigger the stock, the bigger is the misery. Analysts were still skeptical about the assessment, observing that Meta faces stiff competition from rivals such as Tok-Tok. Its revenue was also much lower than expected.
Michael Nathanson, an analyst with Brokerage firm Moffett Nathanson, wrote a note with a title saying “the beginning of the end ” about headline-grabbing results, which revealed deep cuts in Face and not in a good way.
The massive collapse of Facebook stock price portrays how tech companies have become behemoths with ballooning size, commanding unparallel market power and the drama that can follow when they stumble.
The decline can be gauged differently also. A 20% decline in Meta price would mean a 452-point decrease in S&P 500 index.
Twitter Inc., Pinterest Inc., and Snap Inc. were trading at lower levels on Wednesday as pressure on Nasdaq 100 future index mounted. Meta Traded at $251 Thursday, down from $323 the previous day.
The market capitalization of Meta stood at around $900 billion in the previous closing. Meta is part of the FAANG tech group, including Amazon.com Inc., Apple Inc., and Google’s Alphabet Inc.
This is not the first time that Meta stocks have fallen drastically. It also plunged earlier, falling 19% in July 2018 on a slowdown in users’ growth, translating to about $120 billion declines in market cap. It was the record largest loss of value in a single day for a U.S. traded stock.
According to Analyst Sham Patil of Susquehanna Financial Group, factbook can kitchen sink the current outlook.
