Meta Platforms CEO Mark Zuckerberg lost $24 billion in 24 hours following a bad earnings report, while social media floods with crocodile tears.
Some days it just doesn’t pay to be a billionaire.
Case in point: Mark Zuckerberg, CEO of Meta Platforms (FB) – Get Meta Platforms Inc. Class A Report, formerly Facebook.
Zuckerberg lost $24 billion from his net worth, while his company dropped $200 billion in market capitalization after Meta Platforms posted weaker-than-expected fourth-quarter earnings Wednesday.
His net wealth, which results mostly from his Facebook shares, was estimated at $121 billion at the close of the markets on Feb. 2, according to the Bloomberg Billionaires Index.
But with the rout of Facebook following the poor results of the fourth quarter, it is now estimated at $97 billion dollars, according to Bloomberg. This fall will take Mark Zuckerberg out of the Top 10 richest people in the world, a first since July 2015.
Facebook’s market value amounted Wednesday evening before the results to $897.94 billion. Thursday, it had melted to 687.38 billion before the opening. About $210 billion went up in smoke in 24 hours.
The company reported a profit of $3.67 a share, down 6% from a year ago and short of Wall Street’s call for $3.84 a share.
Meta also said spending will close in on $100 billion this year while noting slower user growth rates and a pullback on advertising budgets.
Shares were down 22.2% to $251.40 in premarket trading Thursdays. Shares closed at $319 on Tuesday.
“we had a solid quarter as people turned to our products to stay connected and businesses continued to use our services to grow,” Zuckerberg said.
Analysts lined up to slash their price targets on the social media giant following the news.
JPMorgan analyst Doug Anmuth was one of them. He downgraded Meta to neutral from overweight and cut his price target to $284 from $385.
Anmuth, who also removed the shares from the firm’s Analyst Focus List, said Meta is seeing a “significant slowdown” in advertising growth while “embarking on an expensive, uncertain, multi-year transition” to the Metaverse.
Tough compares, the macro environment and currency are part of the near-term story, the analyst said, but TikTok competition and the Apple iOS changes will both have a bigger impact than expected in 2022, and stronger engagement in Reels, the company’s response to TikTokm is “cannibalistic to monetization” in the near term.
Anmuth believes Meta shares will be under further pressure or range-bound in coming months.
Sarcasm was running high on social media with one poster saying on Twitter that he was “devastated” on Zuckerberg’s behalf.
“There are no words for the anguish I feel,” the commenter tweeted. “Don’t worry, though–I’ll be OK.”
