Meta’s Earnings Flop Threatens to Derail Nasdaq 100 Rebound

(Bloomberg) -- An ugly forecast from Facebook parent Meta Platforms Inc. is threatening a rebound in the Nasdaq 100 Stock Index that's been fueled by strong earnings reports from its megacap peers. It would also set a grim historical milestone.

The social media giant's warning on Wednesday afternoon that it's facing numerous challenges to growth sent its stock tumbling about 22% as of 5:30 p.m. in New York, and rippled through other technology stocks. An exchange-traded fund tracking the Nasdaq 100 fell about 1.8% in postmarket trading. The tech-heavy index has gained 8.1% after closing at a seven-month low on Jan. 27.

If Meta's double-digit drop holds on Thursday, it has the potential to erase about $200 billion in market value from the company -- bigger than Netflix Inc.'s total value at current prices. 

Read more: A 22% One-Day Loss for Facebook Would Be Epic

The after-hours selling was most heavily concentrated in companies that like Meta, generate the bulk of their revenue from digital advertising. Snapchat owner Snap Inc. sank more than 20%, while Pinterest Inc. and Twitter Inc. both fell more than 7%. 

The pain was felt beyond social media stocks, however. E-commerce giant Amazon.com Inc., which is due to report earnings on Thursday afternoon, is down more than 3% . Companies linked to the metaverse like Roblox Corp. and Matterport Inc. also declined.

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