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Facebook (NasdaqGS: FB) parent Meta Platforms plunged on Thursday and was on pace for its biggest one-day decline on record, dragging down communication services sector-related exchange traded funds.
On Thursday, the Communication Services Select Sector SPDR Fund (XLC) decreased 6.0%, the Vanguard Communication Services (VOX ) fell 5.3%, and the Fidelity MSCI Communication Services ETF (FCOM ) dropped 5.4%.
Meanwhile, Meta Platform shares plummeted 26%. FB makes up 22.4% of XLC, 17.3% of VOX, and 17.2% of FCOM.
Facebook owner Meta Platforms retreated after the social media company revealed a weaker-than-anticipated forecast, pointing to Apple’s privacy changes and greater competition for users from rival social media platforms like TikTok, Reuters reports.
Facebook’s global daily active users also dipped quarter-over-quarter for the first time to 1.929 billion from 1.930 billion. The company also showed 2.91 billion monthly active users over the fourth quarter, or no growth compared with the previous quarter.
Meta specifically highlighted the negative effect of Apple Inc.’s privacy changes to its operating system, which made it harder for companies to target and measure their advertisements on Facebook and Instagram.
“It’s clear that there are many big roadblocks ahead as Meta faces tough new competition for ad revenue such as TikTok, and as it contends with ongoing ad targeting and measurement challenges from Apple’s iOS changes,” Insider Intelligence analyst Debra Aho Williamson told Reuters.
Looking ahead, the social media company warned of slowing revenue growth in the quarter ahead as a result of heightened competition for users and shifts in online activity toward features like short videos, which generate less revenue.
Meta’s total revenue increased to $33.67 billion for the fourth quarter from $28.07 billion year-over-year, beating analysts’ estimates of $33.40 billion, according to IBES data from Refinitiv.
“I’m encouraged by the progress we made this past year in a number of important growth areas like Reels, commerce, and virtual reality, and we’ll continue investing in these and other key priorities in 2022 as we work towards building the metaverse,” CEO Mark Zuckerberg said in the earnings release.
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