Facebook Parent Meta’s Stock Plunges 26%, Loses More Than $200B in Value(wsj.com)
wsj.com
Facebook Parent Meta’s Stock Plunges 26%, Loses More Than $200B in Value
https://www.wsj.com/articles/facebook-owner-metas-stock-price-plunges-premarket-jolting-tech-investors-11643887542
22 comments
Where did all the value go? Furthermore, where was it before it just up and disappeared.
Thinking about the stock market requires quite a bit of imagination, if we are being honest.
There is definitely a lot of magical thinking involved but I wouldn't call that imagination.
It was in the brokerage account of everybody who owned FB shares
The value went nowhere... it ceased to exist.
The value went nowhere... it ceased to exist.
Sounds like it didn't exist before either.
Well it did, because facebook bought companies with that stock at that higher price. So that 'value' is now within facebook. There's alot of companies on that list, but one such example is Kustomer, Inc.
Infact you could go back a bit too, since Whatsapp was bought that way too. I very much doubt the original facebook has much value - it's all in this new stuff. But there was very real value acquired.
If there was no value before, then they got all of that for free - and with it very real cash flows and very real money. Mind you too, facebooks revenue hit above $117bn and profit actually went up.
Also i'd love to be on the other end of a deal where I got something like that in exchange for 'nothing'.
Infact you could go back a bit too, since Whatsapp was bought that way too. I very much doubt the original facebook has much value - it's all in this new stuff. But there was very real value acquired.
If there was no value before, then they got all of that for free - and with it very real cash flows and very real money. Mind you too, facebooks revenue hit above $117bn and profit actually went up.
Also i'd love to be on the other end of a deal where I got something like that in exchange for 'nothing'.
So if all that value is gone now does that mean WhatsApp ceases to exist? Or does it have negative value now?
FB's value is determined by investors' expectations of future cash flows (dividends to equity holders) discounted to present value at a certain rate.
Today's price change means people expect to receive less dividends from FB in the future.
That cash flow can come from a variety of businesses within Meta, including WhatsApp.
It stands to reason that Facebook (as in the "facebook.com" component of Meta) is now regarded by these investors as being worth less than they thought before due to the fact that the company reported a decline in the number of users for the first time in its history.
Today's price change means people expect to receive less dividends from FB in the future.
That cash flow can come from a variety of businesses within Meta, including WhatsApp.
It stands to reason that Facebook (as in the "facebook.com" component of Meta) is now regarded by these investors as being worth less than they thought before due to the fact that the company reported a decline in the number of users for the first time in its history.
It'll soon be worthless. VR is not a moat and it's unlikely Zuckerberg will manage to convince people that putting on a VR headset and hanging out in a virtual space is going to be preferable to hanging out in real life. I'm surprised there wasn't a bigger selloff. At some point the US government will also start tightening data sharing requirements and at that point their ad targeting will be essentially be non-functional.
If they have a bigger selloff count me in as a buyer since if they pay a dividend i'll be very quickly getting my money back.
Their next earnings report is going to be even worse and the one after that even worse than that and so on. They're in a death spiral.
As a practical matter, I'm not sure to what degree it makes sense to think of stock prices in those terms these days. But, yes, stock price in principle is the net present value of dividend flows.
It is also reasonable to ask what the more mercenary employees or would be employees of companies like Facebook do when stock becomes a lot less attractive.
It is also reasonable to ask what the more mercenary employees or would be employees of companies like Facebook do when stock becomes a lot less attractive.
It very much existed. Any such stockholder could sell their shares and use the money for whatever purpose.
I'm aware you're obviously pushing an agenda / trolling here, but the fact of the matter is that your opinion is factually incorrect. You not understanding the value of something doesn't mean it does not exist.
I'm aware you're obviously pushing an agenda / trolling here, but the fact of the matter is that your opinion is factually incorrect. You not understanding the value of something doesn't mean it does not exist.
flowtheorist(2)
I wouldn't be surprised if FB shed some more value tomorrow