Shares in Meta, which owns Facebook and Instagram, have plunged more than 20 per cent after a downbeat set of results from the tech giant.
It comes as investor doubts about Mark Zuckerberg’s vision for the future grow, and revenues and profits decline.
Meta’s sales shrank by 4 per cent in the three months ending in September to $27.7bn, while profits halved.
The fall in shares is set to wipe $78bn off the firm’s market value if the losses hold until the end of Thursday.
A year ago, Mark Zuckerberg declared virtual reality the next frontier to drive Facebook’s growth. But so far, there has been very little of it.
The company, which also owns WhatsApp, is struggling as companies cut advertising budgets in the face of economic uncertainty, changes to Apple’s privacy settings hurt its targeted ads, and competition from rivals such as TikTok heats up.
Zuckerberg, who founded Facebook at university almost two decades ago, acknowledged the firm faced “near-term challenges”.
He said the company was focused on becoming more efficient and hinted at job cuts, saying the firm may be a “smaller organisation” next year.
But on a conference call stacked with sceptical analysts, he also maintained that the company was on the right path, as it invests in ways to keep people on its apps and stakes a claim in the emerging world of virtual reality, also known as the metaverse.
“There are a lot of things going on right now in the business and in the world,” he said. “We’re going to resolve each of these things… I think those who are patient and invest with us will end up being rewarded.”
Investor confidence plunged in February, when the company revealed it had lost daily users for the first time ever. Then in July, the company reported its first quarterly decline in revenue, as companies spooked by the economic outlook cut their advertising budgets.
Prior to the firm’s update, the value of Meta’s shares had fallen 60 per cent since the start of the year, wiping hundreds of billions off the company’s value.
They slid further on Thursday, after executives warned that recovery would take an improvement in the wider economy. (BBC)
