What’s Causing Meta’s Biggest Ever Stock Market Loss?

Recent years have seen Meta’s ownership of various big-name apps significantly increase. Currently, some of the apps owned by Meta include Instagram, WhatsApp, Facebook and other Facebook-related apps such as Messenger. The scale of this ownership only makes Meta’s recent stock market loss more significant as it brings to attention just how much is at stake for them and their investors.

The Impact Of Competitor Brands

It’s no secret that Meta-owned apps have always taken on characteristics held by their competitors.

When Snapchat introduced its ‘stories’ feature in 2013, both Instagram (in 2016) and Facebook (in 2017) followed by producing their own variation of this.

The same can be said about Instagram’s ‘reels’. These have clearly been influenced by TikTok’s main function of sharing user-made videos rather than still images (what Facebook and Instagram were originally made to do).

Despite such content diversification efforts, Meta has been unable to stop large proportions of its current and potential users from turning to new and popular platforms like TikTok and Snapchat.

Recent iOS Updates

As of the fourth quarter of 2021, Apple held a 23.4 per cent share of their market whilst competitor brand Samsung came in second with a market share of 19 per cent (Statista, 2022).

This success is reflective of the fact that Apple has been in the top 5 worldwide smartphone brands since 2009 and continues to be highly influential. This widespread use of Apple’s products that run on the latest iOS14 is another factor influencing Meta’s decreased stock market status.

iOS14 now gives users the option to ask apps not to track them, therefore increasing the number of users from which Meta-owned apps will not be able to gather any data.

This prevents Meta from selling this data to advertisers who would have then targeted Meta’s audience with personalised ads. Without this option to gather data from such a large proportion of their audience, Meta’s profits and stock shares have decreased significantly.

Consumers’ desire for autonomy over their data is only growing and being catered to by companies such as Apple. This raises the question of how companies like Meta will be able to gain these lost profits back in the future. Consequently, investors will also question which companies are best to engage with as we head further into 2022.