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Why is Facebook Stock Down?
If you are wondering why Facebook stock is down, then read this article. You’ll learn why the social network is struggling, how its user figures are declining, how its advertising business is generating more profits than ever, and why Meta Platforms (NASDAQ:FB) stock has plunged more than 8%. In addition, we’ll talk about how TikTok has become so popular. And we’ll look at how Apple’s new privacy rules may have hurt Facebook.
Meta Platforms (NASDAQ:FB) stock plunges more than 8%
As Facebook‘s market cap falls to nearly $237 billion, the stock price of Meta Platforms (NASDAQ:FB) tumbles more than 8%. The stock is now trading at a massive discount to the Nasdaq 100 index. While investors may be put off by the massive decline, many on Wall Street are praising Meta. Nearly three-fourths of analysts are bullish on the stock, with an average price target of 60%.
On the positive side, the company’s cash position is at a staggering US$48 billion, or nearly 9% of its market cap. The company has a long-term track record and a solid social media platform. This may interest you : How to Install a Facebook Pixel on Your Website. Facebook has over 1.9 billion daily active users (DAU) and 2.9 billion monthly active users (MAU). More than six out of 10 people log in every day, which gives Meta a huge moat.
Facebook’s operating income surges 30% to $10.4 billion
The first quarter financial report from Facebook has surpassed analysts’ expectations by more than half, with revenue and profit rising more than 50 percent. While revenue is still less than the analysts’ projection of $5.26 billion, Facebook’s operating income has risen nearly three times as fast. On the same subject : How Do I Make a Video Fit My Facebook Cover?. The company continues to benefit from the surge in Internet use that fueled the global flu pandemic. Facebook’s operating income also rose as the number of users increased, from 1.65 billion to 3.51 billion monthly.
While Facebook’s stock price is down almost 20% year to date, it may end up higher on Thursday, after the market closes. This would be the company’s second-best day ever, and its biggest gain since July 2013. Though Facebook’s operating income rose 30%, the company missed estimates for monthly active users. Revenue rose 7.8%, while analysts were expecting an increase of seven percent. While Facebook’s revenue surpassed analysts’ expectations, the company also missed its quarterly revenue guidance.
Apple’s privacy changes
The new iOS privacy controls are causing Facebook stock to plummet. The company, which was among the loudest critics of the privacy changes, warned investors that the new software could hurt its ad business. Apple’s changes are also affecting the metrics the company shares with advertisers. See the article : How to Add an Admin to Your Facebook Page. Facebook had previously warned that the new measures would hit its bottom line by $10 billion in 2022. That’s about one-tenth of Facebook’s annual revenue in 2022.
The changes are affecting Facebook’s ad business, which Facebook largely depends on to reach customers. Apple’s new policies require companies to ask users’ permission before tracking their personal data. Facebook relies on Apple ads to reach its audience. The company warned investors that the changes would hit small businesses the most. However, the effects on Facebook’s bottom line are likely to be greater than Facebook’s analytics suggest.
TikTok’s success
Facebook has seen its share of share price decline in recent months because of the booming popularity of TikTok. While Facebook has largely ignored TikTok’s success, the service is gaining a wider user base and expanding its demographics. Users are no longer limited to lip-synching or short music videos. The website has even attracted law enforcement videos, with the #ThinBlueLine hashtag garnering more than 4 billion views in its first year. This is significantly higher than the number of videos uploaded to the site in recent months.
According to a recent report by Sensor Tower, over 850 million people worldwide downloaded TikTok in January 2020, a number that far outpaces that of Facebook’s WhatsApp. The figures also include Douyin in China, which accounts for roughly a quarter of all downloads. TikTok has been installed on more than 3 billion devices around the world. The app hit one billion downloads in February 2019 and surpassed the two-billion milestone in April 2020. Since January 2020, more than 900 apps have been launched related to TikTok.
Zuckerberg’s relationship with founders of companies he has acquired
Some investors are wondering if Mark Zuckerberg’s relationship with the founders of companies he has acquired is the reason for the steep fall in Facebook stock. This lawsuit stems from Saverin’s claims that Zuckerberg misused his money and spent it on his personal expenses. The suit also claims that Saverin, who was a Harvard student at the time, used the social networking website to sell unauthorized ads.
Mark Zuckerberg and his co-founders were friends and worked on the first version of Facebook in 2002. Moskovitz was a Harvard Economics major when he met Zuckerberg, and worked on the product from his dorm room. He was promoted to Chief Technology Officer, where he led the Data and Platform Development teams. He also oversaw the design of new products. After leaving Facebook in 2008, D’Angelo co-founded Quora, a web-based database of user-submitted questions.
