Alveena Ahmad
With former President Donald Trump targeting Facebook as the “enemy of the people” in an attempt to strengthen his rival social media platform, shares of Facebook and Instagram parent company Meta plummeted on Monday, marking their worst day on Wall Street in almost eight months.
Important Information
Tuesday’s closing price of just under $484 for Meta shares, a nearly 4.5% decline, was the social media giant’s lowest since late last month and its worst showing since July 20 of last year.
The abrupt decline followed Trump’s remarks on CNBC’s “Squawk Box” program on Monday morning. The former president stated that a possible federal ban on the TikTok social media app, which is owned by China, could benefit Meta by making it “bigger” and characterizing it as the “enemy of the people, along with a lot of the media.”
According to a fourth-quarter earnings report released last month, the company’s full-year revenue jumped 25% to a peak of just over $40 billion. It also comes less than two months after Meta’s shares broke a record high and one month after it posted its biggest-ever profits in CEO Mark Zuckerberg’s alleged year of efficiency.
Since the beginning of the year, Meta’s stock has increased by almost 29%, bouncing back from its dismal 2022 slump caused by operating losses from the company’s foray into augmented and virtual reality.
WHAT TO WATCH FOR
Last week, the House Energy and Commerce Committee voted 50-0 to move forward with a bill banning TikTok. The bill gives the platform’s parent company, ByteDance, six months to sell the platform or risk having its use by Americans banned. Following the vote, House Majority Leader Steve Scalise, a Republican from Louisiana, promised to bring the bill to the chamber floor as soon as this week. The bill will go to the Senate if the entire House approves it before it can be sent to President Joe Biden, who has indicated he will sign the legislation. On Monday, Republican front-runner Donald Trump remained silent about his support for the ban.
CONTRA
In recent months, Meta has also found itself in legal hot water. For example, it was named in a lawsuit brought by 33 states alleging that the platform misled the public about “substantial dangers,” particularly addictive features aimed at minors. Meta was taken to court once more two months later, this time by New Mexico officials who asserted that the company uses Facebook and Instagram to establish a “marketplace for predators in search of children upon whom to pray.” According to Meta, it employs specialists in child safety and utilizes “sophisticated technology” to “rout out predators.”
Conclusion
Zuckerberg’s net worth was also eroded by Meta’s Monday losses, as the fourth-richest person in the world lost an estimated $7.7 billion on the day. Zuckerberg is far less wealthy than LVMH tycoon Bernard Arnault ($234.2 billion), X owner Elon Musk ($196.5 billion), and Amazon founder Jeff Bezos ($190.5 billion), with a net worth of roughly $169.6 billion.
