Zuckerberg’s Fortune Falls Over $70 Billion, Illustrating Meta’s Troubles

Bloomberg — Mark Zuckerberg’s change in strategy regarding the direction of Meta Inc. (META), now focused on the metaverse, has come at a heavy cost in the real world.

Despite the fact that it is a tough year for all the big technology companies, the amount of wealth evaporated from their assets differs from the others. It has more than halved, dropping $71 billion this year, the most in the Bloomberg Billionaires Index.

At $55.9 billion, it is now 20th on the list, the lowest since 2014 and 14th below where it was on January 1.

Less than two years ago, Zuckerberg’s wealth stood at $106 billion, putting him in an elite group with only Jeff Bezos and Bill Gates boasting higher figures. He peaked at $142 billion in September last year, when the company’s shares were worth $382.

The following month, Zuckerberg introduced Meta and renamed the company from Facebook Inc. From there, the company has gone largely downhill as it struggles to find its place in the tech universe.

His latest earnings reports have been dismal. It began in February, when the company revealed that it had not increased the number of monthly Facebook users, triggering a historic crash in its share price and reducing Zuckerberg’s fortune by $31 billion. one of the largest declines in history in a single day. Other problems are Instagram’s bet on Reels – its answer to TikTok’s short video platform – despite the fact that its value is lower in advertising revenue, while the sector in general has been affected by lower spending on marketing due to to concerns about an economic slowdown.

Shares are also being dragged down by the company’s investments in the metaverse, said Laura Martin, principal internet analyst at Needham & Co. Zuckerberg has said he expects the project to lose “significant” amounts of money in the next three to five years.

In the meantime, Meta “has to get those TikTok users back,” Martin said. It is also hampered by “excessive scrutiny and intervention by regulators,” he said.

The Menlo Park, California-based company is doing worse in 2022 than most of its fellow FAANGs. It’s down about 57% this year, far more than declines of 14% by Apple Inc (AAPL), 26% by Amazon.com Inc (AMZN) and 29% by Google parent Alphabet Inc. ( GOOGL) Meta is even closing the gap on 2022 losses with Netflix Inc. (NFLX) down around 60%.

If it weren’t for its push into virtual reality, the social media giant “would be more in line with where Alphabet is at,” said Mandeep Singh, a technology analyst at Bloomberg Intelligence.. Meta could get around this problem by spinning off some of its other businesses, such as WhatsApp or Instagram, he said.

Nearly all of Zuckerberg’s wealth is tied up in Meta stock. He owns more than 350 million shares, according to the company’s latest proxy statement.

Zuckerberg has attempted a kind of rebranding. He recently uploaded a video of himself practicing mixed martial arts and repeatedly referred to himself as a “product designer” in a three-hour conversation on the Joe Rogan podcast.

–With the help of Jack Witzig.

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Zuckerberg’s Fortune Falls Over $70 Billion, Illustrating Meta’s Troubles