Shares of Meta, the company formerly known as Facebook, plunged on Monday, continuing declines triggered last week by earnings that were weaker than expected and concerns over data privacy.
Meta shares slumped 12.18 per cent, extending losses for the third day after a record drop last week. The company’s shares are down 34 per cent since the start of the year. The decline has been fuelled by concerns including privacy changes to Apple products that make it harder for advertisers to see how their ads work on Facebook.
Meta, which owns social media giant Facebook and Instagram, is facing myriad challenges. It is in the middle of a number of regulatory fights and looking to justify its strategic shift to bet on an immersive internet known as the metaverse.
In a report published on Thursday, the company again threatened to pull Facebook and Instagram from Europe if it is unable to keep transferring user data back to the US amid negotiations between regulators to replace a scrapped privacy pact.
EU regulators have for months been stuck in negotiations with the US to replace a transatlantic data transfer pact that thousands of companies relied on. It was struck down by the EU Court of Justice in 2020 over fears citizens’ data is not safe once shipped to the US.
Responding to threats from Meta to quit Europe, German Economy Minister Robert Habeck and French Finance Minister Bruno Le Maire said on Monday that life in Europe would be fine without Facebook.
“After being hacked I’ve lived without Facebook and Twitter for four years and life has been fantastic,” Mr Habeck said.
The disappointing earnings figures last week added to the company’s challenges. Data showed it had lost daily active users for the first time in its 18-year history as its net profit dropped more than 8 per cent annually in the fourth quarter to $10.2 billion.
The results, which point to stagnant growth, triggered the biggest ever single-day market value wipeout for a US company on February 4, with Meta's stock plummeting 26 per cent, erasing more than $200bn in value.
That pulled down founder and chief executive Mr Zuckerberg's net worth to $85bn, pushing him outside the list of the world's top 10 wealthiest people — and the exclusive $100bn club — for the first time since July 2015.