Meta has already lost more than 54% of its share’s value over 2022 so far, compared with about a 14% loss of SP500. Just on Tuesday, along with the general decline seen across the markets, Facebook shares value fell 9.4%, printed the worst day since February 3, while the Nasdaq Composite Index fell 633 points or 5.2%.
After closing the Tuesday at $153.13, which was the lowest level since March 23, 2020, Wednesday, this downward continued by 1.5% more to 150.65 US dollars at the time of writing. The current price is much lower than pre-pandemic levels. It is worth mentioning that the lowest level seen after the Covid-19 crisis was $137 on March 2020.
While most social media are losing value, Facebook is leading this downward rotation.
Meta and other social media platforms have been falling this year amid concerns about the impacts of increasing inflation and more hawkish policies, which ends with fewer economic activities and, finally, fewer advertisements which is the most income source for them. Among other well-known names that fell sharply, we can see Snap Inc. by 7% loss and Pinterest Inc. by 4.3%. Also, Alphabet Inc., which runs the YouTube platform and the Google suite of services and live more on an advertisement, slipped 5.9% on Tuesday, but on Wednesday could regain about 0.54% to trade at 105.85 US dollars.
It is worth mentioning that with these reductions, Meta, the fifth-most-valuable company in the US by the end of 2021, currently fell behind Visa, Tesla, and others to be named the 10th most valuable company in the United States. Nick Mazing, the director of research at Sentieo, who has been tracking the changes in market values over recent weeks, said that “Meta, like the other social-media companies, has been negatively affected by the moves that Apple did in the advertising business as well as the general anticipation of lower ad spending as we might be going into recession,”
While some analysts name rival companies like TikTok as one of the essential reduction factors, macroeconomic threats, including inflation concerns and other economic issues, are the main reason. Chief Executive Mark Zuckerberg, in July earning call, said, “we seem to have entered an economic downturn that will have a broad impact on the digital advertising business.”
From the technical point of view, the 20 weekly Moving Average at $172.20 seems to be the main resistance level, while in all main charts, technical indicators remain bearish.