Meta fell out of the top 20 U.S. companies today after 23% of its stock price was wiped out. Last summer, the company became worth a trillion dollars, but since then its market cap has declined to just $269.07 billion. According to CNBC, the company has not traded this low since early 2016 while former President Obama was still in office.
The latest stock price drop for Meta comes after it reported a second quarterly decline in earnings. Some investors, such as Altimeter Capital, believe Meta needs to “get its mojo back”. Altimeter Capital’s head, Brad Gerstner, suggested that the company should limit spending on the metaverse and reduce staff numbers by a massive 20% to boost investor confidence. He said these actions would double the company’s free cash flow.
In a comment on Wednesday about the situation, Mark Zuckerberg said:
“There’s macroeconomic issues, there’s a lot of competition, there’s ads challenges especially coming from Apple, and then there’s some of the longer-term things that we’re taking on expenses because we believe that they’re going to provide greater returns over time. I appreciate the patience and I think that those who are patient and invest with us will be rewarded.”
The decline in Meta’s stock price has been so dramatic that CNBC compared the wipe off as “reminiscent of the dot-com bust days” but that much more value has been erased from just one company. While Meta’s stock price may be making dramatic moves, the situation now is vastly different to how it was two decades ago. Meta’s products are mature household names that are used by billions of people, and that’s unlikely to change anytime soon.