Meta's big share slump pulls down Pinterest, other social media stocks

Vladimir Vladimirov/E+ via Getty Images

When Facebook (NASDAQ:FB) sneezes, it's no surprise that other social media companies catch a cold.

As such, social media stocks crumbled in after-hours trading Wednesday in the wake of heavy disappointment from the quarterly report of Facebook parent Meta Platforms (FB), as its shares fell nearly 22% after turning in results that missed Wall Street's expectations.

To put Meta's (FB) losses in a little more perspective, those declines implied a loss of a full $193 billion off the company's market capitalization.

And losses extended to Meta's (FB) social media peers. Twitter (NYSE:TWTR) shares fell 8.4%, Pinterest (NYSE:PINS) dropped by 10%, and Snap (NYSE:SNAP) shares plunged more than 17%.

For good measure, semi-social name Alphabet (GOOG, GOOGL) was also in the red, falling almost 2% even though it flexed its muscles Wednesday following its own upbeat quarterly results.

In Meta's report, the new focus on grouping application revenue into "Family of Apps" has actually slightly obscured the fact that the namesake Facebook app actually declined quarter-over-quarter in daily active users.

Earlier, Morgan Stanley dove into engagement data to find clues about which social media companies could leverage it for monetization.

Comments

[Clark158f1]

GOOG is taking HUGE market share from FB

[john.fAIrplay]

If you were "in the market" for shares, I hope you bought some GOOGL/GOOG during the regular session today. Stock's up $50 in after-hours on AMZN and other earnings reports. Should see less fretting tomorrow.

[M11M]

@john.blockchain (aka Fairplay) Amazon is about nearly 20% too in after hours. back up to over 3300 per share. Do you think Amazon with do a stock split like Google is planning to do? I kind of hope they will.

[GB77]

FB has lost $200 billion in market cap as the guidance failed to meet the expectations. There could be some shift in the strategy as big organic spendings may prove to be unjustified. Well timed acquisitions, on the other hand, could make sense. For quite a while PINS has been struggling with the monetisation of its user base. But at the market cap of $17 billion excluding cash it is a relatively cheap option to support the growth of a tier-1 co like MSFT or FB.

[sapient]

What other company puts their customers in 'jail' and even publicly bans them?

www.wsj.com/...

At some point, people take the hint and reduce or eliminate their use of Facebook

[Dex4Sure]

Irrational, considering their competitors likely gained at Meta's expense...

[Amos Tuck]

Facebook Owner Meta Set for $200 Billion Wipeout, Among Worst in Market History

www.bloomberg.com/...

This record won't stand very long.

There's an $800 billion air pocket underneath Tesla's stock price. 📉

[ritholtz47]

@Amos Tuck
Or amazon in the evening after the results.

[Erich Reimer]

People are still looking for online platforms to connect and interact at, particularly amid lockdowns and work from home, so where did they go? I think the rise of TikTok has been a big driver for Facebook's decline in usage.

[bluescorpion0]

you mean old men gawking at twerking teens is the future?

[careful investor 1]

@Erich Reimer tik tok and fb are 2 different businesses.

[DKnewb]

FMZ

[omarakthar]

Ok imagine if someone bought 100 shares of FB on margin at market close. They would have lost half of their investment in a few hours.

[careful investor 1]

@omarakthar this is why you don't trade on margin

[sakethreddy78]

The haters are always there for FB. This drop is gonna be hard for me. But a perfect opportunity to slowly add if it keeps dropping. This is a quality business with enough talent on board to generate the next phase of growth

[TigerCub911]

Uh-oh, I put a GTC order for $PINS at $24.84 last week. Forgot to cancel and now I own $PINS and it dropped that much even before the earnings. Might drop to $15. Now I'm forced to buy protective puts just in case. Sighhh

[emcsqard]

From CNBC Analyst Consensus: there were 19 Strong Buys, 31 Buys and 9 Holds on FB. I wonder how many downgrades there will be this morning.

[careful investor 1]

@emcsqard these clowns don't know anything.

[stonksa172]

How did GOOG have record ad revenue while FB saw cuts in ad spending?

[renewable_energy_is_marketing]

Facebook: a digital dopamine manipulation platform on a nominal social network built to collect, store, and monitor your personal data for purposes of monetization and centralized social control (social credit scoring, censorship, etc.)

[DKnewb]

@renewable_energy you left out-developed by DARPA as project name Life Log.

[WayneCDN1876]

Just think if you were Mark Z, and tomorrow you knew you were responsible for the destruction of 1.5$ trillion in stock value.

[farwest]

@WayneCDN1876 Lol, like he even cares - he's made hundreds of billions over the years from schmucks who use his silly platform

[Growth Movement]

@WayneCDN1876 he was responsible for the value creation in the first place.

[Heavy Mettle]

@WayneCDN1876 Great point, except that if I were Mark Z, I would not care….the man has no conscience.

[9013185412]

FB sells hate and fear for ad clicks. This company should not even exist.
We should have an open source free site(no spyware/adware) where we can connect with friend. Forcing people to give up their privacy to connect with friends is EVIL.

[lucideuphoria]

@9013185412 Yeah that existed. Internet forums and chatrooms. Even those were not really free because it costs money for hosting. So they may show an add ribbon.

The government could create one for us to use... but then everyone would think the government is spying on them.

[MICHAELSONG]

@9013185412 lol...why dont you create one:)))

[careful investor 1]

@lucideuphoria you must be a communist

[farwest]

"To put Meta's (FB) losses in a little more perspective, those declines implied a loss of a full $193 billion off the company's market capitalization."

Meh, who cares about valuation? That's so yesterday thinking. Now we determine share prices on momo and 'disruptive' rainbows.

Heaven forfend a cloud appears!

[jmartinp33]

@farwest I see you are a disciple of Cathy woods.
Kidding, I got the sarcasm. :)

[Blowback2]

Time to start charging. 3$/month?

[MadisonAv]

@Blowback2 I can't understand why they don't charge for any of it. Fb core, Instagram, WhatsApp. All of these, especially the first 2, can be monetized via subscription. And no, the majority of users won't leave over a $1 to $5 (region based) monthly sub , they're hooked to the stuff.

[LittleMilk]

When your forward growth is not based on ads or selling my data, but rather me buying a digital house & digital farts... you're going to have a bad day.

[Joe2922]

Metaverse (not necessarily FB versions) have very advantageous business applications such as testing stuff before producing it. Nvidia is red hot partly because of the metaverse business usefulness of it. Most have no desire to use it for games and social usage. I could never wear anything on my head like that, can't even stand to wear hats or eyeglasses, sunglasses.

The only SM I've ever used are stock message boards and SA comments. Investor Village is great but most use SA instead now. Investor Village is great for stock and sector boards (gold, oil, biotech, for examples) and use html. Can post photos, videos, charts, etc.

FB and instagram do more harm than good. Small businesses were helped. I don't understand the allure of tik-tok at all. No wonder so many claim to be "so busy".
Zuck is in love with money no matter the consequences - no conscience whatsoever. Actions matter, not his lying words.

[M11M]

@Joe2922 I took a look at the Investor Village page.. Looks like there is no free option for them??