Meta Platforms, Inc., formerly known as Facebook, Inc., stock is on a downward trend. Year to date, Meta’s stock is down nearly 35%, losing more than $300 billion in Market Cap.
The following are some of the reasons behind the sudden crash of Meta’s stock:
- During the recent earnings results, Meta reported that it lost Daily Active Users (DAU) for the first time.
- Apple’s recent privacy restrictions in iOS will cause Meta to lose $10 billion in revenue this year.
- TikTok is attracting young audience and advertisers away from Meta’s properties.
- Growing regulatory hurdles around the world related to data privacy and exchange.
- Antitrust investigations in the US.
Meta’s market cap is now just below $600 billion. If the stock continues to slide for a few more weeks, it may settle around $500 to $550 billion market cap.
Several bills are currently in progress in the US targeting Big Tech. It includes the Platform Competition and Opportunity Act which will restrict Big Tech companies from acquiring their rivals. These bills use a market cap threshold to classify whether a company will be subject to the rules.
The recent competition bills targeting Big Tech had a market cap threshold of $600 billion. A Senate bill recently used a market cap threshold of $550 billion. Meta can escape the upcoming new rules since its market cap will be less than the defined threshold.
Yes, it will take quite some time for these bills to become law. So, there is a possibility that the bills could be amended to lower the market cap even further to target companies like Meta.
I think the US government should amend their bills based on an organization’s market position and impact, not market cap. Market cap fluctuates every day based on investor sentiment and it should not affect the Big Tech reforms that are needed for the technology industry to thrive in the US.