On Monday, the parent company of Facebook and Instagram, Meta, experienced a significant decrease in stock value after former President Donald Trump labeled Facebook as the “enemy of the people” to boost his competing social media platform. This resulted in the worst trading day for the company on Wall Street in nearly eight months.
Meta Key Details
The price of Meta shares dropped by almost 4.5% and closed at just under $484 on Tuesday. This is the lowest closing price for the social media company since the end of last month and its worst performance since July 20 of the previous year.
On Monday morning, there was a sudden decrease after Trump’s comments on CNBC’s “Squawk Box” show. He mentioned that if the US government were to ban the Chinese-owned social media app TikTok, it could potentially help Meta grow and label it as an “enemy of the people” along with other media outlets.
In their latest fourth-quarter earnings report, the company revealed that their annual revenue increased by 25% to reach a record-breaking amount of $40 billion. This impressive performance came shortly after Meta’s stocks reached an all-time high and just a month after CEO Mark Zuckerberg claimed to have achieved his most profitable year yet.
Meta’s stock has seen a rise of approximately 29% since the start of the year, recovering from its poor performance in 2022 due to losses incurred from its venture into augmented and virtual reality.
Things to Look Out For
The previous week, the House Energy and Commerce Committee voted unanimously (50-0) to advance a bill that would prohibit the use of TikTok. The bill requires the parent company, ByteDance, to sell the platform within six months or face a potential ban on its use by American citizens.
Following the vote, House Majority Leader Steve Scalise, a Republican representative from Louisiana, stated that he plans to bring the bill to the House floor for a vote this week. If the bill is approved by the entire House, it will then move on to the Senate and ultimately to President Joe Biden, who has expressed his support for signing it into law. On Monday, Republican presidential candidate Donald Trump did not comment on his stance regarding the proposed ban.
OPPOSING
Meta has faced legal issues recently, including a lawsuit filed by 33 states claiming that the platform misrepresented potential dangers and targeted minors with addictive features. The company was also taken to court by New Mexico officials, who accused it of using Facebook and Instagram to facilitate the exploitation of children by predators. However, Meta has stated that it has a team of child safety experts and utilizes advanced technology to identify and eliminate predators on its platform. According to Meta, it employs trained professionals and advanced technology to prevent predators from using its platform to target children.
Summary
The value of Zuckerberg’s assets was also reduced due to Meta’s losses on Monday, resulting in an estimated loss of $7.7 billion for the fourth wealthiest person in the world. However, Zuckerberg’s net worth of approximately $169.6 billion is significantly lower compared to that of Bernard Arnault, owner of LVMH, with a net worth of $234.2 billion, Elon Musk, owner of X with a net worth of $196.5 billion, and Jeff Bezos, founder of Amazon, with a net worth of $190.5 billion.
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