Insights

Why Meta Platforms Stock Dropped Today

What happened
Meta Platforms (NASDAQ: FB) stock trailed the market in early trading on Tuesday, with shares falling 3% by 11 a.m. ET, compared with a 1.4% slump in the S&P 500. The decline added to significant losses for shareholders so far in 2022, as the social media giant’s stock is down nearly 50% since the start of the year.
Concerns are rising about what the company might have to say about its growth and earnings prospects in an upcoming quarterly update.

Image source: Getty Images.

So what
Meta is scheduled to issue its first-quarter earnings results after the closing bell on Wednesday. Worries about that announcement are likely the main driver behind the stock’s underperformance today. It also doesn’t help that the Nasdaq index is seeing significant selling pressure, down nearly 3% in morning trading.
Concerns about the business mainly fall into two big categories. First, Meta Platforms’ advertising revenue, its core profit source, is under pressure as platform owners like Apple make it harder to track users’ browsing behavior. That pressure is being amplified by slowing user growth on both Facebook and Instagram.
Second, the company’s bets on virtual reality, the metaverse, and augmented reality haven’t demonstrated solid returns yet. Instead, the reality labs division posted a $10.2 billion operating loss in 2021.
Now what
Wall Street will be focused on what CEO Mark Zuckerberg and his team say about these challenges on Wednesday afternoon. Investors will be watching for signs of an advertising rebound, or any further evidence that users are moving to other social media platforms.
If Meta can show positive progress, the stock might jump this week given its jarring crash so far in 2022. But investors can expect more volatility as long as there’s this uncertainty about the stability of its advertising business and its bets on future growth.
Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Demitri Kalogeropoulos owns Apple and Meta Platforms, Inc. The Motley Fool owns and recommends Apple and Meta Platforms, Inc. The Motley Fool recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy. –

What happened

Meta Platforms (NASDAQ: FB) stock trailed the market in early trading on Tuesday, with shares falling 3% by 11 a.m. ET, compared with a 1.4% slump in the S&P 500. The decline added to significant losses for shareholders so far in 2022, as the social media giant’s stock is down nearly 50% since the start of the year.

Concerns are rising about what the company might have to say about its growth and earnings prospects in an upcoming quarterly update.

Image source: Getty Images.

So what

Meta is scheduled to issue its first-quarter earnings results after the closing bell on Wednesday. Worries about that announcement are likely the main driver behind the stock’s underperformance today. It also doesn’t help that the Nasdaq index is seeing significant selling pressure, down nearly 3% in morning trading.

Concerns about the business mainly fall into two big categories. First, Meta Platforms’ advertising revenue, its core profit source, is under pressure as platform owners like Apple make it harder to track users’ browsing behavior. That pressure is being amplified by slowing user growth on both Facebook and Instagram.

Second, the company’s bets on virtual reality, the metaverse, and augmented reality haven’t demonstrated solid returns yet. Instead, the reality labs division posted a $10.2 billion operating loss in 2021.

Now what

Wall Street will be focused on what CEO Mark Zuckerberg and his team say about these challenges on Wednesday afternoon. Investors will be watching for signs of an advertising rebound, or any further evidence that users are moving to other social media platforms.

If Meta can show positive progress, the stock might jump this week given its jarring crash so far in 2022. But investors can expect more volatility as long as there’s this uncertainty about the stability of its advertising business and its bets on future growth.

Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Demitri Kalogeropoulos owns Apple and Meta Platforms, Inc. The Motley Fool owns and recommends Apple and Meta Platforms, Inc. The Motley Fool recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

  • This field is for validation purposes and should be left unchanged.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;


To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.


An active and funded account with a positive trading balance is required to continue to have access to the tools;


Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;


Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US & HK* Trades. Click Here!