Facebook’s parent company, Meta, has seen over a fifth of its market value erased in after-hours trading after financial results disappointed on several key measures and it warned current quarter revenues would fall short.
The company, which also includes Instagram in its stable of social media platforms, said it had been informed by advertisers that surging inflation and supply chain disruption were damaging their budgets.
The situation was not helped, Meta said, by the continuing row between platforms and Apple over device privacy settings which have made it harder for advertisers to understand their market.
Advertising accounts for the majority of revenue at Meta.
Please use Chrome browser for a more accessible video player
Oct: Facebook shift to Meta explained
It declared on Wednesday that sales in the current first quarter of 2022 would not meet market forecasts because of the twin ad pressures.
Its shares were down by more than 20% in response. It equates to a hit of $200bn in market value.
Other big names, such as Twitter and Snap, also recorded big declines as investors fretted over wider advertising demand.
It took the gloss off an earnings season for tech stocks that had been largely positive so far – helping shore up values after a shaky start to 2022.
The irony was that Meta’s fourth quarter revenue figure of $33.7bn, up from $28bn a year earlier, was the only metric that exceeded analysts’ estimates in its latest results.
Facebook monthly active users were 5% up year-on-year, Meta said.
It broke out the performance at its Reality Labs division for the first time – part of the business that is not expected to be profitable for some years.
The augmented and virtual reality division reported a net loss of $10.2bn for 2021 as a whole. That was up from $6.6bn over the previous year.
Mark Zuckerberg, Meta founder and chief executive, told investors: “We had a solid (fourth) quarter as people turned to our products to stay connected and businesses continued to use our services to grow.
“I’m encouraged by the progress we made this past year in a number of important growth areas like Reels, commerce, and virtual reality, and we’ll continue investing in these and other key priorities in 2022 as we work towards building the metaverse.”
The company also confirmed its stock exchange ticker would complete the Meta rebrand and become “META” later this year.