S&P 500: Mark Zuckerberg’s Pipe Dream Turns Into $618 Billion Nightmare

Mark Zuckerberg’s plan to dominate the metaverse is turning into a nightmare for everyone. And it’s costing the real world serious cash: $618 billion to be exact.

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Shares of S&P 500 member Meta Platforms (FB), the company formerly known as Facebook, crashed nearly 25% Thursday to 97.94 following a dismal earnings report. The company, which is shifting toward money-losing virtual reality products and away from its social media gold mine, reported a quarterly profit that missed expectations by 11%.

After this latest leg down, more than $600 billion in market value has vanished since the company announced its new name nearly a year ago on Oct. 28, 2021. And the stock is down a crushing 69% since then — more than double the declines of other mega-cap tech stocks.

Meta Pain Getting Major

Meta’s major wipeout is spreading pain throughout the S&P 500. Keep in mind this company was worth nearly $900 billion a year ago. It consistently ranked among the top 10, if not top 5, most important holdings in the S&P 500.

Now, it’s valued at just $263 billion — marking one of the most colossal falls in S&P 500 history. Even the epic crash of Enron cost investors less ($75 billion). And Meta is now only the fifteenth largest holding in the S&P 500, behind Chevron (CVX) and Johnson & Johnson (JNJ).

And Meta’s market value loss is rivaling those of Microsoft (MSFT) and Alphabet (GOOGL) in the bear, despite those companies being much larger.

Meta’s Pain Hurts Everyone

There’s no question who the biggest loser from Meta’s move is: Zuckerberg himself.

Zuckerberg has watched as $76 billion of his Meta holdings have gone up in smoke since Oct. 28, 2021. He’s still the single-largest holder of the stock. Zuckerberg owns nearly 13% of the company with 348 million shares.

But the losses are ballooning. Meta’s largest owners are major mutual fund and ETF companies. It’s a nearly 1% position in the S&P 500, but much larger in other widely held ETFs.

Meta is a key 17% piece of the Communications Services Select Sector SPDR (XLC) ETF. And it’s still the seventh largest position, accounting for 2.5%, in Invesco QQQ Trust (QQQ).

The question is when will investors step in and contain the madness? Activist investors only own a small slice of the company, says S&P Global Market Intelligence. Each owns less than 0.2% of the company, including New York State Common Retirement Fund, D.E. Shaw and Davis Selected Advisors.

When will the Meta nightmare end?

Biggest Drops In Market Value Since Meta’s New Name

Sources: IBD, S&P Global Market Intelligence from name change on Oct. 28, 2021 through Oct. 27, 2022