Facebook share price faced its worst-ever crash after a disappointing quarterly earnings report
Facebook's owner Meta Platforms, saw its stock market value plummet by more than $230 billion (£169 billion) on Thursday, in a record daily loss for the US company.
Its shares fell 26.4% after the latest quarterly numbers disappointed investors. According to the Bloomberg Billionaires Index, the drop in the company's stock price has reduced CEO Mark Zuckerberg's net worth by $31 billion.
Disappointing quarterly earnings report
Meta, formerly known as Facebook, reported a net income of $10.3 billion in the final three months of last year, down 8% from the same period a year earlier and less than Wall Street analysts' expectations.
The quarterly report noted a decline in their monthly active users (MAU) for the first time in its 18-year history. This came after Meta revealed that Facebook's DAU fell to 1.929 billion in the three months to the end of December, compared to 1.930 billion in the previous quarter.
This was the first time ever that this measure of activity was reflected on the world's largest social network. And it didn't stop there, the Facebook-funded Diem cryptocurrency ended
Meta also warned of slowing revenue growth in the face of fierce competition from rival platforms, including TikTok and YouTube. The company expects revenue of between $27 billion and $29 billion for the first quarter of this year, which is lower than analysts had expected.
Although the company is making investments in video services to compete with TikTok, which Chinese tech giant ByteDance owns, it is making less money from this product line compared to its traditional Facebook and Instagram feeds.
What do we expect from Facebook stock?
By look at the daily charts for Facebook, the stock fell during yesterday's trading to its lowest level since July 2020. In fact, the current declines may continue for a while, supported by bearish technical indicators and the continued strength of the selling momentum on the MACD indicator. After the disappointing report, the price could reach the $266.50 levels.
A bearish follow-through and a break of these levels may open the way for a further decline towards $210 per share level.
From the top side, resistance levels for the stock are at $247 and $277.