Tech Business News said, the Facebook platform is losing popularity. Back in 2018 younger American’s and Europeans began to leave the platform in droves. Back then that was still okay for Facebooks bottom line because the developing market uptake was growing at a much faster rate then western markets were leaving.
In a earnings report the company stated for the first time in it’s history the social network platform was losing daily users overall. The media giants Indian, African and Lantern American markets are now bleeding users.
The platform may have reached peek saturation. Young people in developing markets now go straight to Tictok and in western markets Facebook is now seemingly a destination for the older generation and mothers groups. Everyone else now mainly uses it for messenger, groups and events.
The main Facebook wall where most of the social media advertising takes place is not exactly why people visit the platform anymore.
Apples move to make ad tracking more difficult has also hurt Facebooks bottom line. The Facebook business model is advertising driven after all.
In short, Meta wasn’t going to be making as much money from Facebook as they forecast. This news surprised the markets. For anyone with knowledge about trading, markets absolutely despise surprises.
From here we saw the biggest Wipeout in history. This is obviosity a pivotal point Facebook and the question is what’s going to happen over the next few years.
Facebooks loss in popularity isn’t the only reason for the fall. The whole Meta company is going through a lot of controversy. There’s been major pressure from regulators and other government bodies after the harm that Instagram and Facebook causes to young teens was exposed over and over again by various whistle blowers.
To add this this the Metaverse ventures has already caused the company a 8.3bn loss despite real-estate sales exceeding 500 Million in 2021 with the expectation of this figure doubling in 2022
To succeed Meta needs to big slice of the growing pie. In addiction growth and risk stocks may had had their time in sun.
Overall the US economy is not looking to great. The country recently crossed a $30t debt and may dip into recession with the Atlanta fed predicting GDP growth next quarter of 0.1 percent. Inflation is rising to record highs. 70 percent of GDP last quarter was companies simply hording stock inventory in fears on inflation.
Many investors are asking themselves does this seems to be a great time to be putting money into speculative tech stock?
For now the answer may still well be yes. But in a couple of years investors may turn elsewhere for safer returns. So its the end of Meta?
It’s highly doubtful. Other Meta sub-brands like WhatsApp and Instagram are still adding users. Meta also plans to focus on their short video format, Reels to bring in more users and generate more revenue. This recent crash with Meta was most likely a stock market over reaction and the stock will probably bounce back in no time.
