Facebook Sales Drop As Result Of Stocks Death Spiral
Users are beginning to flee Facebook leading to dangerous stock price drops as the social media company scrambles to escape the low performance of Meta stocks.
The Decreasing Value Of Meta Stocks
With Meta trading at the lowest level ever since January 2019 and losing two-thirds of its value, Facebook’s decision to turn Meta last year has left the social media company a victim of the latest stock death spiral.
Facebook has been an extremely popular site built on network effects allowing its users to invite their friends and family to join in on connecting in one place.
However, in 2022, the growing advertisement for the company that helped to ensure its profits began to cease, with users jumping ship and advertisers in turn reducing their spending.
With the growing social media frenzy and threat posed by Tik Tok, businesses are beginning to remove Facebook’s social login button from their websites causing worry for the company’s future.
Action from Zuckerberg
CEO of the company Mark Zuckerberg spends his time now shaping the metaverse development to help ensure the company’s future, however, this is costing billions of dollars to build despite accounting for none of the near-term revenue.
In terms of Zuckerberg’s hopes for the future in the next decade he hopes that the metaverse ‘will reach a billion people’ and ‘host hundreds of billions of dollars of digital commerce.’
The Future Of Facebook
Up until this year, Facebook has been seen as a growth story with its slowest revenue for growth being during the pandemic of 2020 when it still expanded by 22%.
However, whilst nobody is suggesting that Facebook will go completely out of business, it is no longer seen as a company constantly increasing in growth with the number of daily active users in the U.S and Canada slowly decreasing.
Jeremy Bondy, CEO of app marketing firm Lift Off stated: ‘I don’t see it spiralling in terms of cash flows in the next few years, but I’m just worried that they’re not winning the next generation’.
Sale growth is expected to remain in the single digits going into 2023 as it competes with the likes of Tik Tok, leaving Facebook with some hard work ahead to remain relevant in the changing industry.