Meta Platforms Inc., the parent company of Facebook, saw its shares plummet by over 20% following a disappointing forecast. The decline was attributed to Apple’s privacy changes and the rising competition from platforms such as TikTok. Facebook reported no growth in its 2.91 billion monthly active users in the fourth quarter and experienced a decline in global daily active users for the first time. Meta acknowledged the impact of Apple’s privacy changes on its ability to target and measure ads, as well as macroeconomic issues like supply-chain disruptions.

In addition to TikTok, Meta is also facing competition from platforms like Google’s YouTube. The company expects slower revenue growth due to increased competition for users’ time and a shift towards features such as Reels, which generate less revenue. The drop in Meta shares resulted in a $200 billion loss in market value, with Twitter, Snap, and Pinterest losing an additional $15 billion. Even Alphabet, which posted record quarterly sales, saw a nearly 2% decline in its shares.

Meta previously warned of uncertainty in its advertising business for the fourth quarter, with Meta’s CFO estimating Apple’s privacy changes could have a $10 billion impact in 2022. These changes allow users to prevent apps from tracking their online activity for ads, making it harder for advertisers to effectively target audiences.

Despite these challenges, Meta CEO Mark Zuckerberg expressed optimism about growth in key areas such as Reels, commerce, and virtual reality. He emphasized Meta’s commitment to investing in these areas in 2022 as they work towards building the metaverse. However, Zuckerberg acknowledged the competition for users, specifically mentioning TikTok, and emphasized Meta’s dedication to catering to young adults.

Meta’s reality labs, responsible for augmented and virtual reality, reported a net loss of $10.2 billion for 2021, compared to a loss of $6.6 billion the previous year. Zuckerberg had already anticipated this loss, stating that their investment in the area would impact profitability in the near future.

The rebranding of Meta and its focus on the metaverse is seen as a strategic move. The metaverse, a concept of virtual environments for work, socialization, and play, is considered the future successor to the mobile internet. However, Meta’s rebranding comes at a time of increased scrutiny from regulators and lawmakers concerning anticompetitive conduct and content moderation on its platforms.

Overall, Meta’s weaker-than-expected forecast and challenges with Apple’s privacy changes and increased competition have had a significant impact on its shares. As the company tackles these obstacles, it remains dedicated to investing in growth areas and building the metaverse. However, it also faces regulatory challenges and calls for increased content moderation.