New data has revealed that investors purchased 1,828 per cent more shares the day after Meta’s fourth quarter announcement last week following the tech giant’s share price plummeting 26 per cent.
According to analysis from investment bank Saxo Markets, the sell off increased by 587 per cent as many offloaded stock following poor projections from Facebook’s parent company.
The announcement was rooted in internal fears that “increasing competition” is chipping away at Facebook’s social media presence, especially amongst young people.
It also aired concerns over Apple’s privacy changes, which have made it harder for the company to post impressive results.
For Meta, last week also marked the biggest market drop in a single day on the Nasdaq, falling by $251bn (£186bn) in market value in 24 hours.
Mike Owens, Global Sales Trader at Saxo Markets, said: “Meta’s quarterly results and estimations for the year ahead did little to fill investors with confidence and became the catalyst for the biggest wipeout in market history.”
“Our data, however, shows that retail clients have tried to capitalise on the company’s falling share price with Meta being on a consistent upward trend for a number of years”.
“Mark Zuckerberg and his team now face a tougher job than ever before in trying to convince institutional investors that Facebook is still a platform for the future as newer social media companies like TikTok outpace the 2004 company in growth.”
However, Owens also pointed out that it is not all doom and gloom for the social media giant.
He highlighted that although the results were the first time it had announced a drop in users, the company still has 1.93 billion people with a Facebook account across the world.
This was echoed by Laura Hoy, equity analyst at Hargreaves Lansdown, who told City A.M. that “Facebook is down but it is not out.” She believed that it can seek other more inventive monetisation avenues beyond online ads.
The last few weeks have shown the intense volatility of the big tech space, which has only worsened by the prospect of rising interest rates for Silicon Valley firms, as well as more tentative results.