In July 2021, Mark Zuckerberg was the third richest person in the world as per the Bloomberg Billionaire Index. His net worth was $142 billion and Facebook’s shares were around $350 with a market capitalisation of $950 billion. Soon everything fell! Zuckerberg’s wealth declined by over 50% along with a decline in Facebook’s shares. If Zuckerberg’s wealth now stands at nearly $65, Facebook’s market capitalisation is currently under $475 billion.
What has caused this sudden plunge?
The main reason is the profit decline Meta reported in the December 2021 quarter. And, Meta showed a lower-than-expected earnings forecast for the March 20222 quarter; it caused a massive sell-off in the company’s shares. The company lost about $220 billion in investor wealth on February 3, 2022.
Another reason is the stiff competition other platforms, especially TikTok, pose. Although TikTok is banned in India, in the global market, it is a prominent rival of Facebook. Even Zuckerberg has admitted the same.
Above all, Facebook lost a lot of users at the end of 2021. Globally, its daily active users dropped to 1.929 billion from 1.93 billion. Facebook’s advertising model also suffered due to Apple’s app privacy changes. About 97 per cent of the company’s revenue comes from advertising.
It’s time Zuckerberg made a wise decision to come out of this dilemma. Let’s wait and watch what he has up his sleeve.
