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Facebook’s first ever drop in daily users prompts Meta shares to tumble

Facebook’s first ever drop in daily users prompts Meta shares to tumble


Facebook’s first ever drop in daily users prompts Meta shares to tumble
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Facebook shares fell 25% on Thursday - wiping over $200bn (£147bn) off its value - after the company reported its first ever drop in daily user numbers.

The huge collapse - more than value of McDonald's - came after Mark Zuckerberg's newly rebranded social media empire, Meta, said daily active user numbers at its main app - a key growth target for investors - fell to 1.929 billion in the three months to December, from 1.93 billion in the previous quarter.

The symbolic loss of about 1 million users, the first in 18 years, contributed to a share price rout in after-hours trading on Wednesday that resumed on Thursday.

On a call with investors Zuckerberg he was "proud" of the work the company had done last year but acknowledged the company faced tough competition for attention from rivals including TikTok.

"Facebook's big problem is competition for attention - there are only so many people and so many hours in a day and we're already close to saturation point," said Neil Wilson, chief markets analyst for trading platform markets.com

Reporting its first quarterly earnings under its new name, Meta revealed it had spent $10bn on its vision of the future - the "metaverse" - and warned it faced "headwinds from both increased competition for people's time and a shift of engagement". As well as Facebook, Meta owns the photo and videosharing app Instagram, the WhatsApp messaging service and the Oculus virtual reality hardware business.

After a boom during the pandemic, markets have punished formerly hot tech companies including Netflix and PayPal for disappointing results. While Meta's revenues were slightly higher than expected at $33.7bn for the last three months, the drop in daily active users has grabbed investors' attention.

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