Meta’s shock share price drop shakes world tech

Shares in Facebook owner Meta (FB.O) fell 20 per cent in US premarket trade on Thursday after the social media giant issued a dismal forecast, blaming Apple’s privacy changes and increased competition.

The shock drop, which comes before Amazon earnings later in the day, spilled over to Europe where technology (.SX8P) led sectoral fallers with a decline of 2 per cent and soured the mood across global financial markets in another busy day of central bank meetings.

Big US tech has come under mounting pressure in 2022 as investors expect policy tightening at the US Federal Reserve to erode the industry’s rich valuations following years of ultra-low interest rates. Nasdaq (.NDX) fell more than 8 per cent in January, its worst monthly drop since end-2019.

“The downgrade in the earnings outlook by Meta and other companies took markets by surprise,” said Kenneth Broux, a strategist at Societe Generale in London.

“The tech selloff spilled over to broader equity markets this morning and with the Fed preparing to raise interest rates, we could see more volatility going forward.”