$677 Billion Valuation Wipeout Makes Zuckerberg's Meta Slip Out Of World's Top 20 Companies List

The wait for brighter days just seems to be getting longer for Facebook¡¯s parent company, Meta Platforms. Ever since it announced disappointing results for Q3 (June-Sept) as well as a worrisome forecast for the ongoing quarter (Oct-Dec), the company¡¯s stock has been witnessing a bloodbath.

Besides its CEO Mark Zuckerberg losing over $11 billion in a single day last week, taking his tally to over $100 billion in the last 13 months, the company¡¯s valuation too has suffered a big hit. As per a Bloomberg report, Meta's valuation has collapsed by a whopping $677 billion this year, thus forcing it out of the ranks of the world¡¯s 20 largest companies.

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And the ugly days don't seem to be ending anytime soon. Meta¡¯s stock is still down over 20% since it spooked investors with ballooning costs to fund its version of virtual reality last week and a 52% decline in profit. And that's not all. Meta's share price is down over 70% this year, making it a key reason behind the company's valuation collapse.

To put things in perspective, Zuckerberg¡¯s Meta was the sixth biggest US company by market capitalisation at the start of the year 2022, flirting with a $1-trillion market value. And now, fast forward 10 months, and the stock¡¯s worth about $258 billion, ranking it 26th. Its market value is now smaller than companies including Chevron, Eli Lilly, and Procter & Gamble.

As per Bloomberg, the top 10 companies, as per market value, are (rank-wise): Apple ($2.4 trillion), Saudi Aramco ($2 trillion), Microsoft ($1.7 trillion), Alphabet ($1.2 trillion), Amazon ($1.1 trillion), Tesla ($0.7 trillion), Berkshire Hathaway ($0.6 trillion), United Health ($0.5 trillion), ExxonMobil ($0.4 trillion) and Johnson & Johnson ($0.4 trillion).

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Also Read: Meta Raises $10 Billion In Its First Ever Bond Offering

Rating Downgrade Adds To Meta's Woes

Once a Wall Street darling, Meta is gradually losing favour with brokerages. At least three investment banks, i.e., Morgan Stanley, Cowen, and KeyBanc Capital Markets, have already cut their rating of Meta stock after the company gave a disappointing quarterly revenue outlook, as per the report.

As per Meta, it expects total expenses for this year to be $85 billion to $87 billion. And by 2023, that number will grow to an expected $96 billion to $101 billion. Meta¡¯s revenue fell 4% in the third quarter that ended September 30. Overall net income was down 52% to $4.4 billion in the third quarter.

The company¡¯s quarterly capital expenditure was more than all but 16 of the S&P 500 companies spent all of last year, according to Bloomberg data.

Mark Zuckerberg Asks For Patience

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After the disappointing results last week, Meta CEO Mark Zuckerberg had sought to justify Meta¡¯s ballooning costs to fund its version of virtual reality, the metaverse, as well as the artificial intelligence fueling major changes to its social networks. He had asked investors for patience with the social-media giant¡¯s ballooning investments in unproven bets (like metaverse) at an already challenging time for digital-advertising companies.

Before this recent bloodbath that has rattled Meta's valuation, Zuckerberg had already slipped out of Forbes' top 10 richest Americans list for 2022, for the first time in 7 years.

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