The news: As a backlash to its poor earnings results, Facebook owner Meta’s stock price cratered by up to 26%, erasing close to $230 billion in value. The loss could rank as the biggest collapse in US stock market history.
More on this: Declining daily user numbers, a first for Facebook since 2004, wider effects of Apple’s iOS privacy changes, as well as tighter restrictions on user tracking, confounding ad models, and the rise of TikTok, have taken their toll on Facebook, per Insider.
The problem: Last year’s Meta rebrand, a misdirection from Facebook’s poor brand image, failed to buoy profits. And Meta’s $10 billion investment in the metaverse last year didn’t help.
What’s the catch: Meta CEO Mark Zuckerberg reportedly rallied employees to focus on video products late yesterday in response to unprecedented competition from TikTok, whose addictive short-form videos are taking eyeballs away from Facebook and Instagram.
Aside from keeping Facebook afloat and developing the metaverse, Meta now intends to double down on video, specifically the Stories and Reels features on Instagram, which are derivative of TikTok.