Shares of Facebook parent Meta Platforms Inc. plunged Thursday, wiping about $232 billion from the technology giant’s market value, the biggest one-day decline for a stock in U.S. history.
The company startled investors late Wednesday with a sharper-than-expected decline in profit and a gloomy outlook. That pulled Meta’s shares down 26% Thursday to close at $237.76, its steepest one-day decline since it started trading in 2012.
Meta said it expected revenue growth to slow because users were spending less time on its more lucrative services. It cited inflation as a weight on advertiser spending and estimated that ad-tracking changes introduced by Apple Inc. last year would cost Meta some $10 billion this year.
For years, Meta, formerly known as Facebook, has enjoyed its status as one of the largest companies in the U.S. stock market. The sharp plunge in its market value served as a reminder of its influence and dominance. Its drop exceeded the individual market capitalizations of 472 companies in the S&P 500, according to Dow Jones Market Data.
The drop in market value also surpassed the record that Apple set in September 2020. The iPhone-maker lost about $182 billion on Sept. 3 of that year, according to Dow Jones Market Data, during a selloff of technology stocks.
The 26% decline in its stock price weighed heavily on major U.S. indexes and rippled across the market. The S&P 500 fell 2.4%, its biggest percentage decline since February 2021. In contrast, the equally weighted S&P 500 index—which gives the same weight to both the smallest and largest companies in the index—lost 1.4%.
With Thursday’s close, Meta now has a market value of about $647.17 billion, making it the seventh-largest stock in the S&P 500. Warren Buffett’s Berkshire Hathaway Inc., with a market value of about $703.8 billion, replaced Meta as the sixth-largest Thursday.
Investors have fled growth and technology companies over the past month in favor of older-economy stocks that stand to perform better during a period of rising interest rates.
That trend continued Thursday. Amazon.com Inc. lost 7.8% but jumped shortly after the closing bell after it said profits nearly doubled in the holiday period. Snap Inc. tumbled 24%, but its shares soared in after-hours trading after posting its first quarterly profit.
Pinterest Inc. fell 10% and Twitter Inc. slid 5.6%. Spotify Technology SA tumbled 17%, its largest one-day decline on record. The music-streaming and podcast company’s results, released Wednesday, showed that it added users and experienced a surge in advertising revenue, but it declined to issue annual guidance.
“Confidence is being knocked because Meta is such a big player on the indices,” said Susannah Streeter, senior investment and markets analyst at U.K. asset manager and stockbroker Hargreaves Lansdown. “Ultimately Meta is having to invest so heavily into [research and development] and preparing for the metaverse. That’s why it’s getting a thumbs-down from investors.”
Meta Chief Executive Mark Zuckerberg said in October that the company’s focus would pivot to virtual-reality headsets, augmented-reality glasses and virtual worlds, known as the metaverse, in which users can live and work.
Meta shares are down 29% year to date.
Write to Caitlin Ostroff at caitlin.ostroff@wsj.com and Caitlin McCabe at caitlin.mccabe@wsj.com
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Appeared in the February 4, 2022, print edition as ‘Meta Value Fell $232 Billion in Day.’
