Meta's Humiliation ... Largest Stock Price Decline Among S&P 500 Companies

As of November 3 (local time), down 73.5% this year
Performance decline due to poor metaverse business and user decrease

[Image source=Yonhap News]

[Asia Economy Culture Young Intern Reporter] Meta Platforms, the parent company of Facebook, has seen its stock price steadily decline this year, falling to the lowest return among companies included in the Standard & Poor's (S&P) 500, which mainly consists of large-cap stocks on the New York Stock Exchange.

On the 3rd (local time), Meta's stock closed at $88.91, down 1.80% from the previous day, on the New York Stock Exchange regular session. This marks a 73.5% drop from $336.35 at the end of last year. Among the 500 companies included in the S&P 500 index, it has the highest decline rate. Its market capitalization also shrank to $235.7 billion, pushing its market cap ranking down to 25th place.

According to CNBC, only three companies, including Meta, have seen a decline of over 70% this year. Global transparent dental aligner company Align Technology fell 73.2%, and home generator and solar power company Generac Holdings dropped 71.1%.

Meta's third-quarter net profit was $4.4 billion (approximately 6.2 trillion KRW), less than half compared to the third quarter of last year. The fourth quarter is also expected to fall short of last year's revenue, indicating that the stock price is likely to remain sluggish for the time being.

The worsening performance is attributed to the 'all-in on the metaverse' strategy. Meta changed its name from Facebook to Meta and designated the metaverse as its future growth engine, making new attempts. However, this business has recorded a cumulative loss of about $9.4 billion so far this year. Additionally, the number of monthly active users has shrunk to less than 200,000, with a significant drop in users. Competitors like TikTok have aggressively taken away many users.

As a result, voices demanding Meta's restructuring and investment cuts have emerged. Brad Gerstner, CEO of hedge fund Altimeter Capital and a Meta shareholder, sent an open letter to Meta stating that "the workforce should be reduced by 20%, and metaverse investment should be cut to half of the current level."

Meanwhile, Meta has been hit hard by Apple's new privacy policy that prevents smartphone users from being tracked, leading to reduced revenue, and by concerns over an economic recession causing companies to cut advertising spending.

This content was produced with the assistance of AI translation services.