Meta feels Apple’s pangs as Facebook’s forecast weakens

Facebook owner Meta Platforms Inc’s shares sank more than 20% after the social media company posted a weaker-than-expected forecast.

Facebook blamed the lag on Apple’s privacy changes and increased competition for users from rivals like TikTok.

Facebook’s global daily active users declined from the previous quarter for the first time, to 1.929 billion from 1.930 billion.

Meta said Apple’s privacy changes hit its operating system. Meta claims the changes have made it harder for brands to target and measure their ads on Facebook and Instagram.

Meta said it expected slowing revenue growth in the coming quarter due to increased competition for users’ time and a shift of engagement toward such features as its short video offering Reels, which generate less revenue.

Facebook reported 2.91 billion monthly active users in the fourth quarter, showing no growth compared with the previous quarter.

The after-hours slump in Meta shares wiped off $200 billion of its market value.

Peers like Twitter Inc, Snap Inc and Pinterest Inc also lost another $15 billion in value.

Meta’s chief financial officer, Dave Wehner, told analysts on a conference call that the impact of Apple’s privacy changes could be “in the order of $10 billion” for 2022.

Apple’s changes to its operating software give users the choice to prevent apps from tracking their online activity for ads, making it harder for advertisers that rely on data to develop new products and know their market.

Meta forecast first-quarter revenue in the range of $27 billion to $29 billion. Analysts were expecting $30.15 billion, according to IBES data from Refinitiv.

The company’s total revenue, the bulk of which comes from ad sales, rose to $33.67 billion in the fourth quarter from $28.07 billion a year earlier, beating analysts’ estimates of $33.40 billion.

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