Meta plunges, sends markets tumbling

Stocks on Wall Street tumbled Thursday, with Meta, the parent company of Facebook, leading the way with a drop of 26.4%, a loss that erased more than $250 billion off its market value.

The losses weighed on the tech-heavy Nasdaq composite, which fell 3.7%. The broader S&P 500 declined about 2.4%. It was that index’s biggest one-day decline since February 2021.

Meta said Wednesday that changes made last year by Apple that made it harder for apps to track iphone users’ digital habits would cost it about $10 billion in ad revenue this year.

The company’s CEO, Mark Zuckerberg, said that it was having trouble competing with Tiktok, the short-video app, and that Facebook lost users globally for the first time. The company spent $10 billion building augmented and virtual reality hardware as it changes its focus to the metaverse, a theoretical vision for the internet.

Other social media companies also slid. Twitter dropped 5.5%. Snap and Pinterest report earnings Thursday after the market close, and before that, Snap fell 23.6% while Pinterest was down more than 10.5%.

“If a company like Facebook comes out saying it has a significant earning die-down, it’s going to impact the stock perhaps more than other companies that are more reliant on economic growth,” said Saira Malik, chief investment officer at Nuveen, a global investment manager.

The sentiment over Meta’s discouraging earnings went beyond social media companies. Shares of Apple, Microsoft and Google were all lower a the close of markets Thursday.