Meta sees historic stock crush after Facebook growth hampers

Shares of Meta Platforms plunged 27% in an epic rout that, in its sheer scale. The catalyst was startling news that for the first time ever, Facebook's user growth seems to have hit a ceiling and its momentum is stalling. Thursday's collapse wiped out more than $230 billion of market value in an instant.

This quarter's sales forecast also disappointed Wall Street and Chief Executive Officer Mark Zuckerberg saw his personal wealth potentially plummet about $24 billion. He acknowledged that Meta is facing serious competition for user time and attention, particularly from viral video-sharing app TikTok.

The report marks a dramatic turnaround for a company that has posted share gains in every year but one since its 2012 initial public offering, stoking concern that Meta Platforms' flagship product and core advertising moneymaker has plateaued after years of consistent gains.

Zuckerberg said against TikTok, Meta's Reels, is growing quickly, but monetization has been slow. He asked investors for patience as the product ramps up.

Other social media companies also saw their shares decline, with Snap Inc. down 21%, Pinterest Inc. down 8% and Twitter Inc. down 5.1%.

Meta's Reality Labs division, which includes the company's investments in the metaverse and virtual reality, reported an operating loss of $3.3 billion for the fourth quarter, as the company disclosed its contribution for the first time.

Facebook reported 2.91 billion monthly users in the fourth quarter, flat compared with the prior period. The main app's daily active users in North America -- the company's most lucrative market -- declined slightly from 196 million to 195 million users.

Meta said revenue in the current period will be $27 billion to $29 billion, compared with the $30.3 billion analysts estimated on average. Changes to Apple's mobile software that require user permission to gather data for ad tracking are significantly crimping revenue by limited targeted advertising, Meta said.

Sales are also taking a hit because Meta doesn't make as much money from Reels video clips as it does from other products, like News Feed and Stories. Still, executives painted an optimistic picture, saying Reels will one day make as much money as those other products.

Net income in the fourth quarter was $10.3 billion, or $3.67 a share, Meta said, falling short of the $3.84 per share analysts projected. Revenue was $33.67 billion, compared with the $33.43 billion average estimates.

Meta doesn't regularly break down users by age. It also doesn't say how many people use Instagram or messaging service WhatsApp, or how much revenue those properties generate.

The company gets about 97% of its revenue from advertising on its social platforms. It warned again about the impact of recent changes to Apple's iOS software for iPhones, which requires that companies like Meta ask users for explicit permission to gather data about them. Early estimates show that most users decline this tracking, which makes targeted advertising -- Facebook's main selling point to businesses -- harder.