Facebook parent Meta faces historic drop

Shares in Facebook parent company Meta are in the midst of their worst day ever Thursday after the social media giant reported a rare decline in profit due to a sharp increase in expenses as it invests heavily in its transformation into a virtual reality-based company.

Meta’s shares fell more than 23% to $246.76 in early trading Thursday, lopping off more than $215 billion of the company’s overall value, known as its market capitalisation. A drop that big would be the largest ever for a company on a single day. Facebook’s market cap dropped $120 billion on July 26, 2018.

The Menlo Park, California, based company said Wednesday that profit declined 8% to $10.29 billion in the final three months of 2021. Revenue rose to 20% to $33.67 billion. The decline could partly be tied to Meta’s spending on its Reality Labs segment — which includes its virtual reality headsets and augmented reality technology. Meta invested more than $10 billion in the segment in 2021. In addition, recent privacy changes by Apple make it harder for companies like Meta to track people for advertising purposes. (AP)