Why Meta Platforms Plunged Today
Shares of Meta Platforms (NASDAQ: META) fell 5.2% today, even greater than the broader Nasdaq Composite, which was down near 3%.
It appears as though every day brings another negative headline for Meta. Today, there were two. First, The Conference Board's consumer confidence reading came in worse than expected, which doesn't bode well for Meta's ad revenue. Second, a Wall Street Journal article today highlighted a bill making its way through the California State Senate, which would potentially open Meta and other social media platforms to lawsuits over teen addiction.
On Tuesday, The Conference Board, a nonprofit business research group organization, showed consumer confidence dropping to the lowest reading since 2013, with a reading of 98.7, down from 103.2 in May and below expectations of 100. That worse-than-expected reading hit virtually all stocks that are sensitive to consumer spending. Although Meta doesn't sell a lot of discretionary items, with the exception of its virtual reality headsets, it does get 99% of its revenue from advertising. So, lower consumer spending could lead advertisers to pull back on ad spending, which would affect Meta.
Source Fool.com
