The Meta Meltdown: This Chart Shows Facebook’s Fall Among the Most Valuable US Companies

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Haunted by competitive and macroeconomic threats, Meta Platforms Inc. into the ranks of the largest American companies.

After a 9.4% daily drop in its stock, Meta META,
-9.37%
Ranked 10th by market value as of Tuesday’s closing price, under Visa Inc. v,
-3.37%
for the first time since early August. Meta, the parent company of Facebook and Instagram, was still fifth in U.S. companies in December, according to Dow Jones Market Data, joining the four other Big Tech companies: Apple Inc. AAPL,
-5.87%,
Microsoft Corp. MSFT,
-5.50%,
Google parent company Alphabet Inc. GOOGL,
-5.90%

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GOOG,
-5.86%
and Amazon.com Inc. AMZN,
-7.06%
— briefly in the $1 trillion club last year.

However, Meta’s shares have been penalized this year amid concerns about competitive dynamics and the impact of economic uncertainty on ad revenue. That $1 trillion market cap has been slashed by more than half, allowing several companies ahead of Meta — which announced its new company name last October — to jump on the valuation chart.

The market value of Meta has fallen sharply in the past year.

Sentieo

Visa was valued at $413 billion as of Tuesday’s close, compared to $412 billion for Meta. Exxon Mobil Corp. XOM,
-2.34%
is next on the list with a market cap of $397 billion, according to Dow Jones Market Data. Above Visa are still the four other Big Tech companies in Apple, Microsoft, Alphabet and Amazon, as well as Tesla Inc. TSLA,
-4.04%,
Berkshire Hathaway Inc. BRK.A,
-3.32%,
United Health Group Inc. UNH,
-3.25%
and Johnson & Johnson JNJ,
-2.60%.

Meta’s stock suffered its sharpest daily decline since February in Tuesday’s trading, amid broad market pressure caused by the latest reading of the consumer price index, which has revived fears about the potential effects of inflation on the advertising landscape.

“Meta, like the other social media companies, has been negatively impacted by Apple’s moves into the ad sector and by the general expectation of lower ad spend as we may be entering a recession,” said Nick Mazing, the research director at Sentieo. , which has been tracking changes in market values ​​in recent weeks.

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“Additional factors include competition from TikTok and investor skepticism about the company’s metaverse efforts,” Mazing said.

Meta executives have warned of the impact inflationary pressures and other economic problems could have on the company. Sheryl Sandberg, then the company’s chief operating officer, told investors on Meta’s latest earnings call that “recessions are putting pressure on marketers to make sure their advertising budgets are being spent as smartly as possible,” though she thought Meta tools could help them. maximize their investments.

Chief Executive Mark Zuckerberg said during that July call that “we appear to be entering an economic downturn that will have a broad impact on the digital advertising industry.”

Visa shares have held up better against the backdrop of inflation, falling just 8% on the year, while Meta shares lost 54%.

While Meta executives have sounded cautious about the current landscape, Visa’s management team has become more optimistic due to the nature of the payment giant’s business. In April Vasant Prabhu, Visa’s chief financial officer, said inflation had been “net” positive for Visa, and as late as Monday said consumer spending remained resilient.

Visa “is somewhat isolated from the big macro story, the ongoing inflation, because they are paid at nominal volumes,” Mazing told MarketWatch, noting that the company has also benefited from the major uptick in international travel and the spending that comes with it. accompanied .

Meta briefly flirted with placing outside the top 10 most valuable US companies in the US in early August, but the dip below Visa keeps it within the top 10 this time as fellow tech company Nvidia Corp. NVDA,
-9.47%
has also seen its value fall sharply in recent weeks.

Nvidia was ranked seventh by market capitalization earlier this year, but now ranks 15th with a valuation of $327 billion, according to Dow Jones Market Data, amid inventory issues that hit sales totals and a U.S. crackdown on selling high-quality artificial intelligence technology to China.