Meta loses two-thirds of its value in a year.. Find out the reasons

Meta stock is witnessing severe pressures, as it lost two-thirds of its value in one year, and the company exited the trillion dollar club of market capitalizations.

The market value of Meta shares was above a trillion dollars before it switched from Facebook to Meta, but its value has now fallen to 364 billion dollars.

The social media company’s stock is trading at its lowest level since January 2019 and is among the worst performing stocks in the S&P 500 this year.

Facebook’s slump is a reflection of the slump in a company whose business model is that users bring their family and friends to the social networking site.

The company then relied on advertisements to generate abundant profits, which later helped it to hire the best engineers.

But in 2022, users are starting to jump out of the Meta Ship, and advertisers are cutting back on their spending.

The company is currently preparing to disclose its quarterly business results, which are expected to witness a decline in revenues for the second consecutive quarter.

Furthermore, Meta CEO Mark Zuckerberg is focusing on the metaverse business, which may shape the company’s future but does not represent any of its near-term revenue.

Challenging future

Investors aren’t excited about what’s happening in the Meta, and the way they’re dumping the stock makes analysts wonder if the downward pressure is a downward spiral that the company can’t recover from.

For its part, Laura Martin, an analyst with Needham, said she was not sure if the company had a core business operating now.

Despite its negative performance, Meta still occupies a dominant position in advertising and is one of the most profitable business models.

The year 2020 was the slowest in the growth of Meta revenues, due to the repercussions of Corona, however, it increased by about 22%.

Jeremy Bundy, CEO of app marketing company Liftoff, expressed concern about Meta’s cash flow over the next few years, as well as the company’s ability to win over the next generation.

Bundy sees the new generation moving to TikTok, where users can shoot short, viral videos.