Facebook lost its users for the first time ever, with its shares tumbling 20%, resulting in the loss of $200 billion in the value of parent company Meta.
Facebook has lost a large number of its users for the first time in its 18-year history, due to TikTok sweeping the field, according to Facebook CEO Mark Zuckerberg’s analysis of the situation.
- “People have a lot of options about the way they want to spend their time, and apps like TikTok are growing very quickly,” Zuckerberg said .
The site reported a nearly 500,000 drop in daily logins during the last three months of 2021. Zuckerberg confirmed that Meta, which owns Facebook, Instagram and WhatsApp, is pushing hard to develop its short videos, in an effort to compete with TikTok.
“That’s why our focus on Reels is so important in the long run,” he added.
Facebook, which now has 1.93 billion users, also saw its shares fall more than 20 percent in extended trading on Wednesday, after unexpected massive spending on its Metaverse project led to a rare drop in fourth-quarter earnings.
Meta saw its share fall 22.6 percent to $249.90 in post-closure trading, clearing about $200 billion of the company’s market capitalization.
The company invested heavily in the Reality Labs segment, which includes virtual reality headsets and augmented reality technology, during the fourth quarter of 2021, accounting for a large part of the decline in profits.
Zuckerberg, who has a fortune of about $107 billion, owned more than 398 million shares in Meta at the end of 2020. Based on his reported holdings, the CEO personally suffered a loss of more than $29 billion when the company’s stock fell on Wednesday
Analysts claim investors expected signs of slower user growth, but were surprised by the size of the company’s loss in the wake of TikTok’s growth.
TikTok dominates the user-generated short video market, although Meta offers its Reels product on Instagram.