Facebook sees shares dive in brutal tech rout
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Shares on Facebook plunge to a six-year low after the social media giant sees its quarterly profit more than halved
- The 13 percent drop in after-hours trading followed a massacre for technology stocks on Wall Street amid fears an economic downturn would have repercussions.
- About £2.6 trillion of the value of US tech titans has been wiped out so far this year
- The latest plunge in Meta shares came after it posted a 52 percent decline in earnings to £3.8bn for the three months to the end of September
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Shares in Facebook owner Meta fell to a six-year low last night after the social media giant saw its quarterly profit more than halved.
The 13 percent drop in after-hours trading followed a massacre for technology stocks on Wall Street amid fears an economic downturn would stall growth in the sector.
So far this year, about £2.6 trillion of the value of US tech titans has been wiped out. The latest plunge in Meta shares came after it posted a 52 percent decline in earnings to £3.8bn for the three months to the end of September.
Shares in Facebook owner Meta fell to a six-year low last night after the social media giant saw its quarterly profit more than halved
Revenues, meanwhile, fell 4% for the second quarter in a row to £23.8 billion, although better than expected. Metaboss Mark Zuckerberg (pictured) gave a bleak outlook, saying the company faced “short-term challenges” in revenue, while paying more attention to its cost base.
The focus on spending followed a scathing letter earlier this week from Meta investor Brad Gerstner, saying the company should cut staff costs and stop spending so much on its “metaverse” virtual reality projects.
The results caused concern among investors after dismal updates from Microsoft and Google owner Alphabet. Microsoft fell 7.7 percent to $231, while Alphabet fell 9.1 percent to $95. Apple and Amazon, both of which will report their results tonight, fell 2 percent to $149 and 4.1 percent to $116, respectively.
The declines also weighed on the tech-heavy Nasdaq, which fell 2 percent at 10,971. The index has lost more than 30 percent of its value this year amid the industry-wide sell-off.
Overall, the major US tech stocks, Netflix, Meta, Amazon, Microsoft, Alphabet and Apple have collectively lost nearly £2.6 trillion this year as rising interest rates and the cost of living spark fears. that the technological boom has come to a grinding halt. stop.
On Tuesday, Alphabet missed expectations as it released its third quarter results. The company, which owns both YouTube and Google, had revenue of £60bn in the three months to September, which was below the £62bn forecast by analysts.
YouTube advertising revenue was disappointing, coming in at £6.2bn compared to £6.5bn planned as companies cut spending in the face of the economic turmoil.
Established players such as Meta and Alphabet are also facing renewed competition in the ad space from the video sharing app TikTok, which has grown rapidly, attracting a large and mostly younger audience that is increasingly appealing to marketers.
Meanwhile, Microsoft managed to beat expectations for its first quarter results as revenue reached £43.7 billion, countering earlier forecasts of £43.2 billion. But investors were shocked by lower-than-expected revenues from Azure, the company’s cloud computing business, and the weak outlook for the coming months.
One bright spot was Netflix, which brightened markets last week as it reversed a slump in customer base and surpassed Wall Street expectations. The streaming platform said last night that it took in 2.4 million customers between July and September, more than double analysts’ forecasts.