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Why Is Meta Platforms Plunging?


FB stock - Why Is Meta Platforms Plunging?

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Concerns associated with the monetary policy have affected several tech stocks and it has been a tough start to the year. Meta Platforms (NASDAQ:FB) stock has already faced immense pressure due to the controversies surrounding privacy policy issues. But the worst isn’t over for FB stock. The stock is down from $233 to $216 over the past week. It also reported weaker than expected earnings for the fourth quarter and has been struggling since then. There is another piece of news that has led to the drop in FB stock.

The company is making giant leaps into the world of the metaverse, which is the next big thing. Recently, the Security and Exchange Commission (SEC) ruled that Meta should provide investors a chance to consider and vote on a shareholder proposal that questions the social license to operate a technology like the metaverse without fully understanding the risks.

One of the parties who filed the proposal, Natasha Lamb, managing partner of Arjuna Capital, believes that this decision by the SEC is a victory for investors who question Zuckerberg’s leadership and move into the metaverse. She also added that it is essential to keep in mind how material the move toward the metaverse will be for the investors. Due to the $10 billion investment in the segment, the company suffered a massive decline in the stock market and Zuckerberg lost billions overnight. Meta spoke against the proposal and stated that they had the right approach in place for the metaverse efforts. It is less likely that the proposal will pass since Zuckerberg controls the voting shares, but the controversy will have an impact on FB stock.

In more positive news, Meta Platforms is testing new tools to attract users to the platform. It will start to test tools to sell the digital experiences and assets in the platform Horizon Worlds. These tools will initially only be available for a select group of users who can sell the accessories or give paid access to the space they built.

The future of FB stock looks uncertain while the company tries to handle the controversies.

On the date of publication, Vandita Jadeja did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Article printed from InvestorPlace Media, https://investorplace.com/2022/04/why-is-meta-platforms-plunging/.

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