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The Facebook parent company Meta fell to the eighth position among the most valuable US companies following a decrease in market cap.
Following its underwhelming latest quarterly report, Facebook (NASDAQ: FB) parent Meta continued its slide, which now sees the tech conglomerate’s market cap below $600 billion. This is the first time since May 2020 that Meta would be worth less than $600 billion. Furthermore, the Facebook parent has also fallen behind graphics chip-manufacturing giant Nvidia (NASDAQ: NVDA), which closed at $627 billion. As a result, Meta is currently the eighth-most valuable company in the United States.
Meta’s shares dropped 2.1% to close at $220.18, representing an overall drawdown of 35% in 2022. This is the currently the platform’s lowest since July 2020. Last week, following its Q4 report, Meta ascribed the disappointing performance, which also showed a decline in user numbers, to Apple’s (NASDAQ: AAPL) privacy changes. The tech conglomerate explained that Apple’s App Tracking Transparency feature would decrease Facebook’s sales by about $10 billion this year.
Facebook used to be one of the five most valuable companies in the United States. The social media giant was a member of a group that included tech Alphabet (NASDAQ: GOOGL), Amazon (NASDAQ: AMZN), Apple, and Microsoft (NASDAQ: MSFT). However, in addition to recently ranking below Nvidia, Meta now has a $599 million market cap, below Tesla (NASDAQ: TSLA) and Berkshire Hathaway (NYSE: BRK.A). The social media giant is followed by payments processor powerhouse Visa (NYSE: V), which has a current market cap of $478 billion.
Facebook’s Reduced Market Cap Could Prove to Hold One Upside
Despite the sense of foreboding surrounding Facebook’s depleting market cap, there could be a silver lining for the tech giant. This is because the reduced valuation might help it avoid new antitrust scrutiny. The $600 billion Facebook market cap figure is also the number designated by House legislators as the threshold for a “covered platform”. This encompasses a package of sweeping tech antitrust reforms that specifically target the Big Tech companies. As long as Meta remains under this threshold, it could avoid additional hurdles. Possible hurdles include the manner through which the tech conglomerate can conduct its business and make deals.
Notably, the bills targeting big tech giants are still a long way from becoming law. As some House members wrote at the time:
“The bill text as debated is not close to ready for Floor consideration, we urge the sponsors of the bills to take the necessary time, commit to a comprehensive approach, and work with their bipartisan colleagues of this Committee to address the concerns articulated during markup to further develop these bills.”
At the moment, it is still open to amendment. In addition, the current prescriptions can only apply to the platforms for a limited period after they fall below the market cap threshold. A different bill from the Senate puts the market cap threshold at $550 billion, less than suggested by the House.