Social networks are having problems, as their actions are suddenly declining. They wiped out $ 165 billion from their cumulative market value, following Snap’s warning of the risk of missing out on revenue and profitability targets.
Social media is facing a slowdown in the number of users and fears of rising interest rates.
For example, the shares of Snap, a company dependent on digital advertising, reduce the start of transactions by 40%, trading at a record low. Thus, the market value of the company is decreasing by 15 billion dollars. This is the weakest daily evolution in the company’s history, writes Reuters.
In addition, other major social media companies, including Meta Platforms, the owner of Facebook, Alphabet, the owner of Google, Twitter and Pinterest, have decreased. As a result, the sector has a total loss of $ 165 billion.
Snap and platforms like Facebook compete to get money from advertising at a difficult time. Advertisers are facing a shaky economy, as well as changes in privacy, such as Apple’s tracking restrictions, which have slowed the booming business for most of the pandemic.
Free social media: what’s happening with Facebook
From the first year of activity, the number of Facebook users has been constantly expanding. The social network is a vice that continues to attract a record number of users, up to a point.
In 18 years of activity, the number of active Facebook users has steadily increased. This has always been the case and it did not appear that this trend would ever go in the opposite direction. However, the inevitable happened, and in the most recent conference to announce the financial results, Mark Zuckerberg confirmed the decrease in the number of daily active users. Shortly afterwards, the shares of Meta Networks, the giant behind Facebook, Instagram, WhatsApp or Oculus, went up by about 20%.
In the last fiscal quarter of 2021, the number of active Facebook users fell from $ 1.93 billion to $ 1.929 billion. In the same context, Meta officials confirmed a slowdown in advertising revenue growth due to competition from TikTok and YouTube. Although the announcement came quite late at the end of yesterday, even after the closing of the New York Stock Exchange, the shares collapsed by 20%, an unprecedented blow for Mark Zuckerberg. Basically, Facebook is valued today at $ 200 billion less than yesterday.