By
Godfrey Benjamin
April 23rd, 2024
The dwindling fortunes of Facebook has seen parent company Meta lose its position as one of the US top 20 companies ranked by market cap.
Although Facebook was once one of the five most valuable US companies in mid-2021, its parent company Meta (NASDAQ: META) is no longer among the top 20 most valuable US companies. Sixteen months ago, Facebook crossed the trillion-dollar market cap and found itself in elite company with the likes of Apple (NASDAQ: AAPL) and Amazon (NASDAQ: AMZN). However, Meta Platforms is currently worth a relatively measly $270 billion and barely more valuable than Pfizer (NYSE: PFE) and Coca-Cola (NYSE: KO).
Meta stock has been on a downward spiral and further plunged 23% on Thursday to its lowest price since 2016 at $97.94. In addition, the company’s shares are trading 70% lower year-to-date and 74% down since its September 2021 peak. This unsavory development translates to a massive 730 billion market cap loss in that period.
On Wednesday, Meta forecasted a third consecutive losing quarter, with company founder and CEO Mark Zuckerberg citing several macroeconomic constraints. According to Zuckerberg, “there’s macroeconomic issues, there’s a lot of competition, there’s ads challenges, especially coming from Apple, and then there’s some of the longer-term things that we’re taking on expenses because we believe that they’re going to provide greater returns over time.”
In addition, the Meta chief executive also expressed appreciation for investors who were still sticking with the company amid the challenges. Zuckerberg said, “I appreciate the patience and I think that those who are patient and invest with us will be rewarded.”
A Closer Look at Facebook Decline that Pushed Meta Out of Top 20 Most Valuable Companies
Putting Meta’s dwindling value in perspective, the company currently trades for less than one-third of its five-year average. Furthermore, it is also now worth less than Home Depot (NYSE: HD) and worth half as much as Berkshire Hathaway (NYSE: BRK.A).
Meta is also currently less valuable than a host of notable companies in the energy, finance, healthcare, and consumer goods space. These include Chevron (NYSE: CVX), Bank of America (NYSE: BAC), UnitedHealth (NYSE: UNH), Eli Lilly (NYSE: LLY), AbbVie (NYSE: ABBV), and Procter & Gamble (NYSE: PG).
The marked decline in Facebook, and subsequent Meta plummet from top 20 most valuable firms, is a callback to the dot-com bust period. However, the Meta situation sees far bigger value shaved off from a single company. Meta’s descent began late last year amid signs of a slowing economy and moved faster in early 2022 following the Apple privacy change. At the time, Facebook stated that the privacy change to the iOS operating system would lead to a $10 billion revenue loss.
The privacy change targeted behind-the-scenes online and mobile advertising and drew the ire of several online advertising companies.
Although Meta has fallen from trillion-dollar status, the remaining four companies in that fold, such as Alphabet and Microsoft, still retain values exceeding $1 trillion. This feat has come amid roiling markets, rising interest rates, and a looming recession.
Late last year, Facebook changed its name to Meta Platforms to better reflect its shift in orientation towards promoting Web3.