Yesterday, Meta’s stock (formerly Facebook) drop on the Nasdaq was the worst market capitalization loss ever in a single day for a US company.
Facebook, market capitalization collapses
In fact, at the opening of trading, the price suddenly plunged from around $322 at Wednesday’s close to $236, only to close the session at $237.
In other words, in a single trading session, the Meta (FB) stock price fell 26%.
The fact is that the stock capitalizes many hundreds of billions of dollars, so while -26% may not be a record, it is in terms of absolute market cap collapse.
On 2 February the market capitalization was 879 billion dollars, while yesterday it plummeted to $647 billion, with an overall loss of 232 billion dollars in a single day. Nothing like this has ever been seen on the Nasdaq in the past.
To get an idea of how much 232 billion dollars really is, it is a figure higher than the entire market capitalization of companies like L’Oreal, Verizon, Oracle, Accenture or Intel.
Instead, taking cryptocurrencies as a reference, in the world there are currently only two with capitalization greater than $232 billion (BTC and ETH), while the third is Binance Coin with $63 billion (excluding USDT).
Facebook has lost more than $200 billion of market cap today, which is larger than every single cryptocurrency except for Bitcoin and Ethereum.
— Pomp 🌪 (@APompliano) February 3, 2022
To get to 232 billion you have to add up the market caps of BNB, ADA, SOL, XRP, DOT, LUNA, DOGE and AVAX.
In other words, Meta’s market cap loss yesterday is greater than the total market cap of the world’s top eight cryptocurrencies combined excluding BTC, ETH and stablecoins.
The reasons for Meta’s collapse
The problem arose when the final 2021 financial results were released.
Not only did these figures disappoint analysts’ expectations, but more importantly, for the first time in its history, Facebook recorded a quarter-on-quarter decline in the average number of daily active users.
The markets were concerned about both the lower than expected performance and the company’s future prospects, which do not look particularly good.
In November, Facebook announced a name change, to Meta, and a change of perspective, to start dedicating mainly to the development of the metaverse. Unfortunately, this development is proving to be slower than expected, while other companies operating in the metaverse are continuing to expand.
Therefore the future prospects of the group, besieged by more and more competitors, have clearly worsened, just like the trend of the stock price.
It is worth noting that since September 2021, a negative trend has been underway, seeing that after the all-time high of $384 at the beginning of September, the cumulative loss was 38%, well over one third.