Meta’s big plunge: ‘Zuck shock’ is a nasty ‘brush with reality’
Why have the social media giant’s shares fallen off a cliff?

No wonder Mark Zuckerberg is so keen on the idea of the metaverse, said Alistair Osborne in The Times. The “real world” can be very hard to bear. More than $230bn was wiped off the value of Meta – parent of Facebook, Instagram and WhatsApp – in a day last week, when the group released full-year figures showing a decline in users for the first time in its 18-year history. The problem, in a nutshell, is that Meta is losing users to TikTok, while Apple’s changes to privacy settings (making it harder to track personal data) will cost Meta $10bn in ad revenues this year. As commentators were quick to note, the $31bn drop in Zuckerberg’s personal fortune was equivalent to the annual GDP of Estonia. All in all, rather a nasty “brush with reality”.
Talk about a “Zuck shock”, said Katie Martin in the FT. The 26% plunge “was the biggest drop in absolute terms in a US company’s market value ever”, and enough to produce the worst day for the whole S&P 500 in more than a year. For years, “those of a more nervous disposition have been concerned about the outsized role Big Tech plays in US markets” – the worry being that “if they hit a bump, they could topple the rest of the market with them”. After last week’s carnage, that fear is no longer so theoretical.
“There comes a time in every great bull market where the dreams of investors collide with the changing facts on the ground,” said The Economist. Far from being “invincible”, Meta comes across “as a business with decelerating growth, a stale core product and a cost-control problem”. Its troubles reflect two kinds of competition. The first is within social media, where the Chinese-owned app TikTok has become a formidable competitor, despite attempts by former president Donald Trump to ban it on national security grounds. The second is the “intensifying contest” between the Big Tech platforms themselves as they diversify into new services. “The narrative of the 2010s – of a series of natural monopolies with an almost effortless dominance over the economy and investment portfolios – no longer neatly reflects reality.” New winners and losers are emerging.
Subscribe to The Week
Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.

Sign up for The Week's Free Newsletters
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
This has been a week of wild price swings, said James Mackintosh in The Wall Street Journal – as illustrated by Amazon, which, a day after Meta’s big bust, notched up “the biggest market value gain of any US company ever”. These extraordinary moves in Big Tech stocks “in response to small changes in their earnings” shows “what a wacky market we’re in”. Uncertainty about the future of the economy and the tech sector in particular is extremely high. Last week, Meta paid the price.
Sign up for Today's Best Articles in your inbox
A free daily email with the biggest news stories of the day – and the best features from TheWeek.com
-
The battle over Jamaican rum
Under The Radar The spirit that defines the Caribbean is at the middle of a legal fight
By Rebekah Evans, The Week UK Published
-
Do student loans affect a credit score?
the explainer Repaying loans on time will strengthen your credit — but paying late will hurt it
By Becca Stanek, The Week US Published
-
Cherry blossom season: Washington diners’ happy time
feature The five best spots to enjoy the festivities
By The Week US Published
-
What is the the Mar-a-Lago accord?
Talking Point A Maga economic blueprint proposes upending the global financial system. Could it fly?
By The Week UK Published
-
Elon Musk: has he made Tesla toxic?
Talking Point Musk's political antics have given him the 'reverse Midas touch' when it comes to his EV empire
By The Week UK Published
-
Texas vs. Delaware: See you in court
Feature Delaware risks losing its corporate dominance as companies like Tesla and Meta consider reincorporating in Texas
By The Week US Published
-
Trade wars, explained
The Explainer Free trade is almost always good for any economy – so why is it so unpopular?
By The Week UK Published
-
Diversity training: a victim of the 'war on woke'
Talking Point More and more US companies have phased out corporate DEI initiatives, and the incoming Trump administration is likely to fuel the cultural shift
By The Week UK Published
-
Volkswagen on the ropes: a crisis of its own making
Talking Point The EV revolution has 'left VW in the proverbial dust'
By The Week UK Published
-
The World Bank and the IMF: still fit for purpose?
In the Spotlight Washington meeting has renewed focus on whether 80-year-old Bretton Woods 'twin' institutions are able to tackle the challenges of the future
By The Week UK Published
-
Post Office: still-troubled horizons
Talking Point Sub-postmasters continue to report issues with Horizon IT system behind 'one of the worst miscarriages of justice in British legal history'
By The Week UK Published