Bloomberg Via MSN
Meta Platforms Inc.’s one-day crash may rank as the worst in stock-market history. The Facebook parent plunged 24% in U.S. trading Thursday on the back of poor earnings results, putting it on track to erase more than $200 billion. At current levels, that’s the biggest collapse in market value for any U.S. company. But there’s no certainty the losses will hold, especially given the recent volatility that’s whipped across technology shares. Markets have swung wildly in recent weeks, with buy-the-dip traders sometimes storming in during the final hours of the trading day. Still, analysts were bleak in their assessments, pointing out that Meta faces stiff competition from rivals like Tiktok and revenue was far lower than expected. Michael Nathanson, an analyst at brokerage Moffett Nathanson, titled his note “Facebook: The Beginning of the End?” “These cuts run deep,” he wrote. The results were “a headline grabber and not in a good way.”
The sheer size of Facebook’s collapse illustrates just how tech companies have ballooned in size to become behemoths with unprecedented market power, and the drama that can ensue when they stumble. “Lots of U.S. megacaps are priced as growth stocks. They may suffer more in a rising yield environment, especially if growth becomes more questionable,” said Frederic Rollin, senior investment advisor at Pictet Asset Management.
Another way of illustrating the decline: Meta’s decline would be more than the market value of about 470 of the S&P 500’s members.