Meta Stock Plunges 25% as Ad Slump and Metaverse Bets Devastate Earnings
Meta's stock drops to 2016 levels after a weak third-quarter earnings report shows declining revenue and massive metaverse investments. The tech giant faces compounded pressure from an advertising slowdown, Apple's privacy changes, and a strong U.S. dollar.
Meta's stock plummets nearly 25 percent to under $98 a share, a level not seen since 2016, following a dismal third-quarter earnings report. The company reveals that its revenue falls 4 percent year-over-year to $27.7 billion, dropping its total market capitalization to roughly a third of its value from just one year ago. This massive financial hit stems from a combination of a widespread slowdown in digital advertising, Apple's restrictive privacy protocols, and the negative impact of a strong U.S. dollar on global profits.
While other tech giants like Alphabet and Microsoft also struggle with slowing growth this week, Meta's losses are exceptionally severe due to CEO Mark Zuckerberg's expensive and unproven bet on the metaverse. Investors heavily criticize the company for pouring billions into this virtual reality space while the company's core social media advertising business faces significant headwinds. The metaverse division continues to bleed money, creating a deep disconnect between the company's current financial reality and its futuristic vision.
This historic single-day drop highlights a dramatic turning point for the social media giant as it navigates a turbulent economic landscape. With shares down roughly 70 percent since the beginning of the year, Meta faces intense pressure to stabilize its primary revenue streams and prove that its massive metaverse investments will eventually pay off. Until then, the tech community watches closely to see if Zuckerberg can successfully steer the company out of its deepest financial crisis in years.