The value of the day on Wall Street – The stock market debacle of Meta (Facebook), jostled by TikTok and Apple

(AOF) – Meta (-24.86% to 242.67 dollars), parent company of Facebook, lost nearly a quarter of its capitalization, the day after the presentation of disappointing prospects. The social network is facing fiercer competition than expected, in particular from TikTok, and a greater impact than anticipated from the limitation of the use of personal data for advertising targeting by Apple’s iOS 14. “These industry and company-specific headwinds are unlikely to normalize until the second half of 2022,” Goldman Sachs warns.

Symbol of the strong competition facing Facebook, the firm founded by Mark Zuckerberg, has lost subscribers for the first time in its history. The number of daily active users in North America – its most profitable market – fell from 1 million to 195 million users.

Other companies in the industry, including Snapchat, and Twitter to a lesser extent, are also expected to face the same issues.

This is the first results release since the group’s name change to Meta.

In the fourth quarter, turnover increased by 20% to 33.67 billion dollars, emerging slightly above the Bloomberg consensus amounting to 33.43 billion. Advertising sales amounted to 32.64 billion dollars, an increase of 20%, a marked slowdown compared to the previous quarter (+33%) and the second quarter (56%).

On the other hand, profits fell short of expectations. Meta saw its net profit drop 8% to $10.285 billion, or $3.67 per share. The consensus is higher at $3.84 per share.

The Reality Labs division, which brings together products, software and content related to augmented and virtual reality, generated $877 million (+22.3%) in revenue and generated an operating loss of $3.3 billion. . The details of this activity have been revealed for the first time.

But it is above all the business outlook that explains the fall in the share price. Revenue for the current quarter is expected to grow 3% to 11%, or between $27 billion and $29 billion. Wall Street was more bullish, targeting $30.3 billion.

Meta suffers from competition from other social networks, such as TikTok. “Never has Meta faced a platform with more than a billion users, significantly more advanced than it, in an attractive new format,” explains UBS. For the analyst, the sharp deceleration in revenue growth, combined with the fierce battle with TikTok should weigh on the title in the short term. The valuation was thus reduced from 400 to 280 dollars.

Meta also questioned the shift in engagement within its apps to video formats like Reels, which monetize at lower rates than Feed and Stories.

The changes in terms of data protection for their use in advertising targeting by Apple will also continue to weigh on the activity. It restricts the personalization of marketing campaigns and therefore their effectiveness, which leads to a reduction in prices. During the conference call with analysts, Chief Financial Officer Dave Wehner put the negative impact at around $10 billion in 2022.

As headwinds, Dave Wehner also cited the impact of inflation and supply chain disruptions on advertising budgets and currency exchange rates.

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