Shares of Facebook and Instagram parent company Meta tanked on Monday, suffering their worst day on Wall Street in nearly eight months on the heels of former President Donald Trump’s scathing review of Facebook as the “enemy of the people,” as the former president looks to bolster his rival social media platform.
Key facts
- Meta shares dropped nearly 4.5% on Tuesday, closing the day just under $484, marking the social media behemoth’s lowest closing since late last month and its worst performance since July 20 of last year.
- Its sudden drop coincided with Trump’s comments on CNBC’s “Squawk Box” Monday morning, when the former president claimed a potential federal ban on Chinese-owned social media app TikTok over national security concerns could, in turn, provide a significant boost for Meta, making it “bigger,” and calling it the “enemy of the people, along with a lot of the media.”
- It also comes less than two months after shares of Meta skyrocketed to a record high—which the company has since broken—and one month after it posted its biggest-ever profits in CEO Mark Zuckerberg’s so-called year of efficiency, according to a fourth-quarter earnings report last month that found the company’s full-year revenue jumped 25% to a peak of just over $40 billion.
- Shares of Meta have surged nearly 29% since the start of the year, rebounding from its disappointing 2022 doldrums fueled by operating losses stemming from the company’s push into augmented and virtual reality.
What to watch for
The House Energy and Commerce Committee voted 50-0 last week to advance a bill to ban TikTok, giving its parent company ByteDance six months to sell the platform or else face a ban for U.S. users.
House Majority Leader Steve Scalise, R-La., vowed after the vote to take the bill to the floor of the chamber as soon as this week. If it is approved by the full House, the bill heads to the Senate before it can advance to President Joe Biden, who has signaled he would sign the bill.
Trump, the GOP presidential frontrunner, did not say on Monday whether he supports the ban.
Contra
Meta has also found itself in hot waters in recent months, including being named in a lawsuit filed by 33 states over “substantial dangers” the platform allegedly misled the public on, specifically addictive features targeting children.
Two months later, Meta was brought to court again, this time by officials in New Mexico who claimed the company creates a “marketplace for predators in search of children upon whom to pray” on both Instagram and Facebook.
Meta has maintained it employs child safety experts and uses “sophisticated technology” to “rout out predators.”
Forbes Valuation
Meta’s losses on Monday also chipped away at Zuckerberg’s net worth, as the world’s fourth-richest person lost an estimated $7.7 billion on the day, according to Forbes’ estimates.
Zuckerberg’s net worth stands at approximately $169.6 billion, well behind LVMH magnate Bernard Arnault ($234.2 billion), X owner Elon Musk ($196.5 billion) and Amazon founder Jeff Bezos ($190.5 billion).
This article was first published on forbes.com and all figures are in USD.
