Facebook’s stock plunged around 20% on Wednesday, after the company reported a quarterly decline in daily users globally. That drop equated to a market value loss of around $200 billion.
The Facebook app lost about 1 million daily users in North America, and growth across Meta’s other apps (which includes WhatsApp and Instagram) was stagnant. The parent company’s rebrand to Meta doesn’t seem to have been enough to deter criticism and subsequent decrease in relevancy. While the business is profitable due to its high user count and advertisements, it appears that younger audiences aren’t as fond of the platform.
Mark Zuckerberg intends to increase spending on one of Meta’s divisions that oversees projects related to the “metaverse.” This includes virtual reality (VR) and augmented reality (AR) headsets and software, as the CEO sees this as a lucrative financial investment. The issue with this comes alongside falling profit margins for the company’s social media platforms, which help finance those investments.
The corporation has come under fire in recent years for accusations of violating antitrust laws. There’s also been accusations of the company downplaying research regarding Instagram’s effect on teen’s mental health. It’s unsurprising that these chain of events may have had some kind of effect on Facebook’s reputation and ability for increased growth. It’ll be interesting to see if this decline continues, or what effect this may have on the future of Facebook and Meta.
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