The rout in U.S. technology equities intensified on Thursday, as Meta Platforms Inc shares fell 20% following the Facebook parent’s costly metaverse bets and the impact of growing inflation on ad spending frightened investors.
According to Reuters, If losses continue through the session, Meta will lose nearly $67 billion in market value, adding to the trillions of dollars that some of the biggest tech brands have lost this year as interest rates rise and the dollar strengthens.
The market value of Meta has fallen by more than $500 billion this year. Before the bell, their shares were trading at $104.60 and were about to start at their lowest level in more than six years.
Its results follow disappointing financial reports from Google, Microsoft, and Snap, which sparked a widespread selloff in tech markets.
Investors are concerned, according to analysts, because the company is investing in capital-intensive initiatives at a time when the ad market, which is its main source of income, is contracting.
According to Chief Executive Mark Zuckerberg, Meta intends to invest around $10 billion annually in hardware and software for the metaverse, with the investments taking about ten years to pay off.