BEIJING, February 5 (TMTPOST)— Social media giant Meta (NASDAQ: FB) saw its market valuation slumped by US$234 billion on Thursday after announcing disappointing financial results on Wednesday.
Meta’s financial reports show that the company’s revenue in Q4 2021 was US$33.7 billion. Revenue from the company’s advertisement business was US$32.6 billion. The company"s bottom line was US$10.3 billion. Its monthly active users were 2.9 billion, failing to meet the expectations.
The company said that it was expecting current-quarter revenue to be between US$27 billion and US$29 billion, missing the US$30 billion estimate.
Meta is not the only tech giant that has had a bad year in 2021. Video streaming platform Netflix also announced that the company’s earnings did not meet the expectations last week, which caused its share price to suffer from the biggest slump it has experienced in nearly ten years. Payment solution provider PayPal saw its share price fall by around 25% and lost US$51 billion in market valuation after releasing its earnings reports.
Investors have been selling tech stocks and other high-growth stocks in the past few months in fear of rising interest rates.
"This is a very unforgiving environment and this is likely an over-reaction for companies with strong balance sheets. But we are seeing clearly that investors are skittish and they will hit the sell button first and ask questions later," said Michael Farr, chief executive of investment firm Farr, Miller & Washington LLC.
Meta’s metaverse unit Reality Labs lost US$10.2 billion in the past year, according to the financial report. The company’s metaverse business only managed to make less than US$2.3 billion. The news sent Meta’s share price downhill as investors flock to sell their shares in the company. The company’s market valuation shrank by US$234 billion as a result, marking the company’s biggest one-day loss since its debut on the stock market in 2012.
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