Meta Shares Drop Nearly 25%, Uday Kotak Says Amazon Stock May Follow Suit

Facebook parent company Meta Platforms Inc witness a sharp decline of 25% on Thursday as Chief Executive Officer Mark Zuckerberg appeal for patience went in vain.

Earlier, Meta on Wednesday reported that its revenue declined for a second consecutive quarter, hurt by falling advertising revenue amid competition from the wildly popular video app TikTok. The quarter's weak results raised fresh questions about whether Meta's plans to spend $10 billion a year on the metaverse - a concept that doesn't quite exist yet and possibly never will - is prudent, according to a PTI report.

Meanwhile, Uday Kotak, CEO of Kotak Mahindra Bank spoke on the sharp drop in Meta shares, "Facebook Meta drops another 25% yesterday. Amazon stock may follow suit today. Is the stock market a platform for fair price discovery and capital provider to the economy, or a casino roulette?"

Shares of Meta declined 24.5%, its biggest single day fall since February 2022, after Mark Zuckerberg asked investors for patience with the social-media giant's swelling investments in unproven bets at an already challenging time for digital-advertising companies, according to a Bloomberg report.

It is worth noting that Meta's disappointing results followed weak earnings reports from Google parent Alphabet Inc. and Microsoft this week. The Menlo Park, California, company earned $4.4 billion, or $1.64 per share, in the three-month period that ended Sept. 30. That's down 52% from, $9.19 billion, or $3.22 per share, in the same period a year earlier, stated the PTI report.

"Meta has drifted into the land of excess - too many people, too many ideas, too little urgency," wrote Brad Gerstner, the CEO of Meta shareholder Altimeter Capital, earlier this week in a letter to Meta CEO Mark Zuckerberg. "This lack of focus and fitness is obscured when growth is easy but deadly when growth slows and technology changes." Meta also forecast weaker-than-expected revenue for the current quarter, further raising worries that the revenue decline is more of a trend than an aberration, added PTI report.