If you invested ten thousand dollars in Facebook stock during their initial Public offering in 2012 you could have Sold those shares for just under one Hundred thousand dollars in late 2021 However if you held on to those shares For just a year longer your shares would Be worth just under 25 000 we're going to explore what the heck Happened to Facebook or meta in this Great unraveling first we'll briefly Cover the backstory in terms of how Facebook became the darling of Wall Street then we'll get into a simple app Update that would end up costing them 10 Billion dollars finally we'll cover the Metaverse Flop and how one man's Vision Does not always turn into another man's Profits in order to fully understand the Rise of Facebook we have to revisit Zuck's days spent at Harvard Mark Zuckerberg made some important Connections including the the Winklevoss Twins among a few others the twins ended Up launching a site called Harvard Connection with the help of another Classmate Divya Narendra well in 2004 Zuck launched his own site the Facebook Without telling them After becoming a hit this led to a Lawsuit that same year the Twins and the Other classmate claimed that Zuck stole Their concept for his big idea this Ultimately led to a settlement whereas
The trio each received some cash and Facebook stock anyways after Facebook Successfully launched as a social media Platform they went on to create numerous Supporting Digital Services such as Facebook Messenger as the years Progressed users went from sharing text Posts about their day to photos as Camera technology improved at this point Zuck pulled a major move with the famous One billion dollar purchase of Instagram In 2012 rather than competing with Instagram he decided to own them instead Continued success led to an initial Public offering in May of 2012. the Company was valued at 104 billion it's Important to note a crucial detail here That comes back to haunt Facebook Shareholders in years to follow the the Gist is that Mark Zuckerberg can Ultimately veto the votes of the other Shareholders and have final say Facebook Stock had a rocky start after going Public it went from 38 dollars to around 19 over the next six months a drop of Roughly 50 percent however those who Held on or maybe even bought the dip Were rewarded handsomely after the post IPO lol it was pretty much a straight Line up for many years to follow from 2013 to 2018 Facebook stock soared the Stock climbed over 600 percent during That half decade Facebook became a Wall Street Darling by making everyone a
Bunch of money but all good things must Come to an end we must now explore how Facebook began to stumble as their Core Business began facing some significant Headwinds Facebook garnered a user base in the Billions over the course of a few years Across its many offerings in turn they Were able to monetize that user base Through Cutting Edge tracking and AD Targeting this allowed them to print Money literally think about the business Model billions of people use your Digital Services every single day and You simply run ads on most of those Things were running smoothly at Facebook In the late 2010s however that all came To a head in 2018 because of a massive Scandal called Cambridge analytica Through a developer loophole the Personal data of up to 87 million users Mostly in the US was obtained by an Analytics firm that among other work Helped elect President Donald Trump this Became a pivotal moment where everyone Began to question the level of Surveillance and influence Facebook had Over us this Scandal symbolizes the lug Nuts falling off the wheels of the Facebook train while the train would Continue moving forward for a few years Even accelerating during the pandem it All led to a massive crash that stemmed From this Ferry event Cambridge
Analytica led to a major steam blow-off In Facebook stock but not a crash by any Means prior to that news it had reached A price of around 210 in July of 2018. Fast forward to the end of that year and The stock would be trading about 40 Percent lower in December however this Ultimately led to another massive Bull Run in Facebook stock from the beginning Of 2019 until the pandemic hit Facebook Stock surged when the global pandemic Hit there was an initial sell-off in Facebook however it didn't take Wall Street long to realize that shutting Everyone at home leads to a surge in use Of social media platforms during the Flash crash of the pandemic the stock Briefly sold off to 150 in March of 2020. a retraction of roughly 30 percent By May the stock was back to trading at Pre-pandemic levels then the stock Surged again from the pandemic low of 150 the stock ran another 150 three Percent once again it was a money making Party a month before Facebook stock hit All-time highs Tick Tock had officially Become the most downloaded social media Platform Facebook had failed at their Original core strategy of playing 4D Chess and buying out their competition Before it got too big they had Successfully reigned in Instagram Allowing them to have a life raft as the Facebook ship began to run off course
With declining users however they missed The boat on vertical video competition Alone from Tick Tock is not why the Stock dropped as much as 74 while it Plays a role there's much more to the Story in the beginning of 2022 Apple was Able to deal a 10 billion dollar blow to Facebook through a simple app update Just to wrap your head around how large That sum of money is that is 10 000 Million or the entire market Capitalization of Hyatt Hotels what was The update Apple's app tracking Transparency program lets you allow or Block apps from tracking your personal Data remember that Cambridge analytica Scandal as it turned out most people Would rather not have Facebook Instagram WhatsApp or their other apps following Their every move through disabling the Tracking of personal data it would cause Facebook to be unable to access user Information it was using for targeted Advertising even worse iPhone users Typically spend more money than Android Users so they lost a core demographic of Shoppers as mentioned before this update Cost Facebook 10 billion in terms of Lost revenue for context that is roughly Eight percent of what they were making Prior the walls and ceiling were Crumbling in 2021 so where did Mark Ultimately direct the ship the metaverse Of course as long as Zuck is able to
Bring his shareholders into the next Oasis none of that bad news actually Matters Zuck can still win You Can Shed Your legacy business and successfully Pivot into the next big thing however Not all shareholders are on board with The direction that Mark took the ship in And with the voting structure of Facebook there's nothing they can really Do about it either in October of 2021 Facebook rebranded to meta platforms Incorporated and announced the metaverse Truth be told the Zuck wanted to have His Elon Musk moment as he unveiled a New technology that would Propel us into The future instead most people were Confused and critical of the metaverse As it turned out people didn't trust Facebook or meta to usher in this new Era of remote work and collaboration There was also a large group who weren't Concerned about trust but simply felt Virtual reality was a bad idea Following the Rebrand in October of 2021 Metastock was still trading in the low 300s per share it even held this level Through to January metastock would Tumble from 323 on February 2nd to 203 On March 1st a drop of roughly 37 Percent however the pain was just Beginning those who bought the dip got Punished instead of being rewarded Financially as they had been previously By the summer of 2022 metastock was
Trading around 160 in August down Another 21 from the Dip in March however Meta investors had no clue that another Near 50 percent drop would follow Metastock ultimately bottomed at 88 as The low in November 2022. since then Many investors have bought the dip Betting on the turnaround which has Buoyed the stock back to the low 100s Price level to summarize shareholders Have demonstrated with their dollars That they do not believe in the future Of the metaverse at least right now that Is because for the time being it's a Money pit with lackluster graphics and a Limited use case to date about 36 Billion has been spent on Mark's Grand Vision of the metaverse this is Significantly more than the amount Apple Spent launching the iPhone more than Amazon spent launching the Echo and more Than Microsoft spent launching the Xbox The final piece of bad news we will Cover is the first ever layoff Announcement from meta in September this Became the shot heard around the world In the same manner that Netflix's first Ever subscriber loss was as well for Context Netflix stock had a tumble of Equal proportion about 74 percent So is meta platforms doomed probably not At some point mark will pull another 40 Chess move that just so happens to be The next big thing or he already has and
We just don't see that yet Zuck has said That he sees the metaverse as an Investment that will bear fruit in 10 Years or so those who bought the dip Earlier on in 2022 fell victim to a Classic falling knife scenario however At these prices metastock is appealing Assuming they can catch the next big Thing be sure to check out M1 Finance if You want to buy the dip on metastock so You can invest in fractional shares with No trading commissions visit Ryanoscribner.com m1- Finance for more There's a lot of lessons to be learned Here but I think the main one is that You can't expect investors to follow all Of your ideas in business Mark Definitely has a solid track record with WhatsApp Instagram and many of these Other 4D chess moves investors even held On for the most part after the meta Platforms Rebrand it wasn't until the Broad Market started dropping and the Metaverse losses started soaring that Shareholders bounced for now the market Has said no to the metaverse will that Be the answer tomorrow only time will Tell
