Is it over for Facebook stock?

NASDAQ: FB

216.54 USD -4.46 (2.02%) ↓

Closed:17 Feb, 04:12 GMT-5

Pre-market 214.66 -1.88 (0.87%)

The year, so far, hasn't been a good one for Facebook. Shares of parent company Meta fell 26.4% earlier this month, with Mark Zuckerberg's wealth tumbling $30 billion plus.

In the historic plunge of the company, Facebook has lost more than $230 billion in its market value, a one-day loss in the history of a US company, according to Reuters analysis of Refinitv data. The wipeout came amid rising concerns about Meta’s future after it reported its first-ever drop in its earnings report. The company’s advertising was greatly affected by changes in Apple privacy, which Facebook said will cost them billions of dollars.

Meta also reported a discouraging decline in profit due to a rapid increase in expenses due to its investment in “metaverse.” The company’s financial plunge came as a huge disappointment for its investors who have been accustomed to delivering spectacular growth.

In what was considered to be a strategic move, Facebook rebranded to Meta last year. The move was in line with the company's plan to become a virtual-reality-based company – a vision that Zuckerberg has had for a long time.

Laura Hoy, equity analyst at Hargreaves Lansdown said, “Meta CEO Mark Zuckerberg may be keen to coax the world into an alternate reality, but disappointing fourth-quarter results were quick to burst his metaverse bubble.”

On a call with investors on Wednesday, Zuckerberg said he was proud of the company’s achievements in the past year, but acknowledged that Meta faced tough competition for attention from competitors including TikTok.

While Zuckerberg's Metaverse idea has been considered unrealistic by critics, technologists describe the concept as the next-generation version of the internet- a realistic goal. Metaverse is a shared 3D virtual world that allows people to engage in work activities interact with each other, play games, and visit each other, among other things it can do.

The company has made huge investments in Oculus, its virtual reality headset, and the key piece of equipment needed to make the dream come alive.