Meta stock crash how to#

In hindsight, we can go and see whether too much was delivered or too little. I do not want to criticise policymakers but every country had to decide how much monetary and fiscal stimulus was to be given because clearly there was going to be a recession as lockdowns were being imposed and how much one should give. So to take a step back, two years back was very difficult for everyone. Those assumptions start to change when the assumptions on US rates start to get modified. So if one is of the view that it does not make a difference whether the company is making profit today or three-four years down the line, so long as it can grow, the company is being evaluated on how fast it can grow and how much metal or better to the metal kind of investment they are doing so basically even they incur losses or they need persistent inflows of cash. So this is where interest rates and the discount rate start to matter. Is that a readjustment which is taking place or what is considered to be fair value? This is not just for IT, this could be for FMCG and it may be one day going forward, even for the value stocks. We can have a situation where it looks expensive now but two or three years down the line, it may not look expensive. We have been talking about PE compression and it is not just in the tech space. The second issue is that interest rates which have changed.

Yahoo used to be a very big success and then because it could not keep pace with the pace of change of technology, it slided down. They have to prove that they can actually generate profits and that is what the market will trade off. So as US bond yields have gone up, some of the new tech listings have seen a very sharp selloff. We are seeing some of that in the Indian space as well. When we have zero percent interest rates, it does not matter whether you have money today or tomorrow or five years later, but if the interest rates and real interest rates start to move up, then question comes as to whether there is uncertainty in the outlook for the next five or ten years and then the market starts to panic. I must say that this transition is something that the market has woken up to and this is perhaps compounded by the uncertainty around interest rates. The very reason that they have been restrategising is perhaps because they could see it coming and the market has now woken up to them.īut at the same time, there are other tech companies which are still holding on and they have reported very strong numbers. This is a technology transition which has been imminent. There are some companies which are now starting to lose subscribers or rather monthly active users on their apps. There is the next leg of technology transition short videos are taking a lot more share in terms of viewer time and therefore the engagement levels and ad rates that you can get and revenues are starting to fall.

Meta stock crash how to#

Are these stocks falling under their own weight? Do you think these tech giants are going to have to restrategise as to how to build in those growth numbers going forward? Eventually it is the one with the deepest pockets which is going to win the race perhaps? Mark Zuckerberg is not in the top 10 list of the richest people on planet earth anymore.

Facebook lost 26%, its biggest ever selloff. Let’s talk about the tech selloff overnight. One cannot have that for metals or for oil and that is why those stocks trade at lower multiples,' says Neelkanth Mishra, Co-Head of Equity Strategy, Asia Pacific and India Equity Strategist, Securities Research, Credit Suisse Meta is still a digital behemoth, with many billions of users and - more relevantly for shareholders - many millions of advertisers.'As people are very certain about what is going to happen, consumer staples and some of the healthcare names trade at such high multiples because of reasonable visibility on earnings three, four years out. Microsoft and Google owner Alphabet have both seen sharp falls this year. Investors are selling big tech across the board.

When it comes to falls in share price, Meta is in good company. If you do, then maybe Meta shares are for you. He has before.īut ask yourself this: do you want to spend hours in a virtual conference centre with a headset strapped to your face? Maybe Mr Zuckerberg will prove the market wrong. Mark Zuckerberg has made an expensive bet on virtual reality and investors don't believe it's going to pay off any time soon. Many of these issues are common across the tech sector, which has seen big sell-offs in recent days. Throw in Apple's privacy changes, which have made it harder for Meta to collect data on valuable iPhone users, and it's no surprise the firm's share price is falling. Technology correspondent like TikTok are eating up Meta's market share and digital advertising, its core business, is suffering in the economic downturn.