SAN FRANCISCO (KGO) -- Shares of Bay Area tech giant Meta, the parent of Facebook, has ended slightly lower Friday after the company saw a historic plunge Thursday, that wiped out almost $240 billion, a quarter of its market value.
Thursday's losses came after it reported a rare profit decline, shaky ad revenue growth and fewer daily users on its flagship platform.
"The business model isn't necessarily doomed," says CNET Executive Editor Roger Cheng. "It will be here for a while, it is too large and too many people use these platforms for this to go anytime soon."
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"Statistically, at least in some of its core markets, people are still using it but they are facing a lot of competition. I think that is what has the company and its core investors rattled," Cheng said.
Facebook is one of the Bay Area's biggest employers with over 17,000 workers in the Bay Area.
"Profits for Facebook means more taxes for the state of California. The state's tax structure is built on Wall Street going big on tech. Because those capital gains taxes are what really help fuel California's budget and government," ABC7 Insider Phil Matier said.
People's changing online behavior is also limiting Meta's money-making abilities. More people are watching video, such as Instagram's Reels (a TikTok clone), and this makes less money than more established features.
The company also said revenue in the current quarter is likely to come in below market expectations, due in part to growing competition from TikTok and other rival platforms vying for people's attention.
"The impact you might see for users is changes or tweaks to the user interface, the experience as they try to better compete against competitors like TikTok," says Cheng.
Other Bay Area tech giants have seen their stock prices somewhat recover on Friday after the sharp sell off on Feb. 3.