WASHINGTON – In case you missed Wednesday’s big news, Punxsutawney Phil, Pennsylvania’s world famous groundhog and long-range weathercaster, came out and spotted his shadow. As most Americans know, that means 6 more weeks of winter. Appropriately enough, having reported disastrous earnings and forward earnings guidance Thursday, shares of Facebook – er, Meta Platforms (NASDAQ:FB) – headed back deep into the corporate burrow.
Punxsutawney Phil (left) is cradled by one of his subjects as another reads Phil’s wintry proclamation. Should we buy natural gas stocks? (Screen grad, courtesy of Fox29 video clip.)
Meanwhile, it seems like Phil also tucked back into his burrow for at least an additional six-week nap. But that’s a very pleasant alternative to contemplating the Wile E. Coyote-style drop that’s slaughtering Facebook, umm, Meta Platforms investors today. At least the ones who haven’t already bailed.
Facebook does a Faceplant
Seems this company may have gotten tapped out of late by overly optimistic forecasts. The company also blames Apple (NASDAQ: AAPL) for many of its current woes, given the computer and iPhone giant’s clampdown on apps that snoop on customers wherever they go. That issue is also on tap in Congress, BTW. But outcomes there are less certain than what happened to the shares of Meta Platforms thus far in Thursday trading action. Maybe FB’s numbers reflect the often involuntary mass departure of GOP and MAGA fans from this social networking platform. Twitter shares recently suffered a similar fate due to the same self-inflicted malady.
But maybe this is all the fault of Punxsutawney Phil anyway.
Facebook (Meta Platforms) stock crash, Thursday, February 3, 2022. Note the atomic drop in these shares (circled) from Wednesday’s (February 2’s) close thru mid-day Thursday. (Chart courtesy of Schwab’s onlline trading platform.)
The spillover effect from the Meta shares disaster terminated this week’s brief era of good feelings in US markets. The FB waterfall decline hit many tech stocks yet again and clobbering all three major averages as well.
Reuters offers a pretty good rundown on Thursday’s market-bending disaster thus far.
(No link, since we found this news via our brokerage firms research section.)
“Feb 3 (Reuters) – U.S. shares fell on Thursday, with the Nasdaq diving more than 2%, as Facebook-owner Meta Platforms’ dour forecast jolted the broader tech sector and threatened to upend a nascent recovery in stock markets.
“Meta shares sank 25% in what could be the worst single-day wipeout in market value for a U.S. company, as it blamed Apple’s privacy changes and increased competition from rivals such as TikTok for its disappointing outlook.
“The share slump is set to wipe out more than $200 billion from Meta’s market cap, which would shave off about 0.9% from Nasdaq’s market value and about 0.5% from S&P 500.
“The tech-heavy Nasdaq fell 2.2% as shares of other social media companies also took a beating. Twitter Inc and Pinterest Inc fell more than 5%, while Snapchat lost 20.6%.
“Big tech stocks such as Alphabet Inc and Microsoft Corp fell about 0.8% and 1.7%, respectively, while Amazon.com Inc, scheduled to report results later in the day, declined 6.8%.
“‘This is definitely shaking investors’ resolve around the recent relief rally that we’ve been seeing in tech,’ said Robert Pavlik, chief investment strategist at SlateStone Wealth LLC in New York.”
Shaking investors’ resolve? You don’t say. I don’t see a lot of resolve out there right now anyway. Evidence? The relentless yet clueless economic destruction dealt out daily by the White House Resident’s ruthless left-wing junta.
The Twin Tylers shed more light on the growing troubles in the Metaverse
Meanwhile, the indefatigable and cynical Twin Tylers of ZeroHedge offer a bit more color on today’s Meta-Market disaster.
“Facebook – or Meta now that it’s in the witness protection program – is making record after dismal record this morning after its catastrophic earnings and guidance last night: not only is the company’s 22% drop the biggest in its history…
“… but according to Bloomberg, the one-day crash ranks as the worst in stock-market history: the Facebook crash has erased some $195 billion of its market cap. That would make it the biggest collapse in market value for any U.S. company.
“The decline on context: the 20% decline in Meta would be more than the market value of 452 of the S&P 500’s members. And since Meta has a 2% weight in the S&P 500, the decline alone with contribute 0.44%-point negative impact on S&P 500.
“The sheer size of Facebook’s collapse illustrates just how tech companies have ballooned in size to become behemoths with unprecedented market power, and the drama that can ensue when they stumble…
“Of course with a market as illiquid and jittery as this one, there’s no certainty the losses will hold, especially given the recent volatility that’s whipped across technology shares. It makes sense to wait until the close as a furious army of buy-the-dippers has stormed stocks in during the final hours of the trading day.”
Can anyone halt today’s decline in Meta Platforms shares?
Well, as of 2:30 p.m. ET Thursday at least least, that furious army of bullish FB buyers has yet to appear on the distant horizon. But with a market like this one, you never know. Like the Federal government itself, Mr Market continues to steer through a hurricane of relentlessly bad news without a motor. Or a rudder.
There’s likely one bit of news in today’s Meta Platforms disaster. Market gurus estimate political genius Mark Zuckerberg lost $25-29 billion of his personal wealth in today’s market catastrophe. Perhaps he’ll have a little less money to spread around this year to throw this year’s midterm elections. Particularly in Wisconsin and Georgia. Fingers crossed.
But back to Pennsylvania…
It’s Phil’s ancestral home and yet another “swing” state where Zuckerberg might have “fortified” the 2020 election farce. Throughout the Eastern Seaboard, Phil’s winter weather prediction is already bearing fruit. A vicious line of winter storms are already attacking the region. Likely another result of global warming climate change.
That said, Punxsutawney Phil’s traditionally top-hatted entourage of advisers, spokespeople and handlers gathered Wednesday to read Phil’s 2022 proclamation to the teeming masses attending this annual event, as Fox29 News reported in its extended online coverage.
“On Feb. 2, 2022, Punxsutawney Phil emerged from his tree stump with the help of his inner circle and saw his shadow — predicting six more weeks of winter— during a ceremony in Punxsutawney, Pennsylvania.
“‘According to the legend, there will be six more weeks of winter if he sees his shadow. If he doesn’t, spring comes early.
“‘Winter has been bleak, and bereft of hope, yet winter is just another step in the cycle of life,’ one of Phil’s top-hatted inner circle members read from a scroll. [Presumably these elegant words were penned by the talented groundhog himself. –Ed.] “I couldn’t imagine a better fate. With a shadow I have cast… six more weeks of winter!”
A classic Groundhog Day for your viewing pleasure. Let’s not repeat today’s market follow-up!
For those who might have missed the coverage of this epic event, here’s the Fox29 video. It gives us a small glimpse of the pre-Covid America we all used to enjoy. Something that, hopefully, we’ll return to again very soon. (Thank you Canadian truckers.)
Meanwhile, as Punxsutawney Phil duly noted, winter is coming. Yet again. Let’s white-knuckle our way through today’s very Meta and very real market plunge and see what happens next. Let’s all keep our powder (and our cash) dry in the meantime.
