Mark Zuckerberg's Net Worth Dropped $18 Billion in a Single Day as Meta Stock Extended a Losing Streak. Is the Sell-Off Overdone?
Meta's shares appear primed for a rebound.
Overview
Things are going from bad to worse for Meta Platforms (NASDAQ: META). The company already wasn't having a good year, but its second-quarter results, released on July 29, raised even more concerns for many investors and sent shares down about 8% after its update, wiping $18 billion from CEO Mark Zuckerberg's (whose wealth is mostly due to his owning a large portion of the company) net worth. Meta's shares rebounded somewhat after the post-earnings drop, but they are still down 9% year to date. Has the sell-off gone too far?
Image source: The Motley Fool.
One reason investors are worried about Meta's future is that the company is spending heavily on its artificial intelligence (AI) projects. During the second quarter, these investments contributed to a 13% year-over-year decline in earnings per share to $6.18. Even worse, Meta's free cash flow plunged by 91% year over year to $784 million. Zuckerberg is unapologetically bullish on AI. But the last time he was that excited about one of the company's initiatives, things didn't turn out well. Several years ago, Meta Platforms started pouring small fortunes into its metaverse ambitions.
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Originally published at www.fool.com.