Shares of Facebook fell 26 percent in one day in early February; Which reduced its market capitalization by $230 billion. Mark Zuckerberg himself lost nearly $29 billion. This means the biggest one-day drop in the world. Such a significant loss raises the question. What lessons can be taught from this huge crush? 5 Things to Consider About the Facebook Smash.
Success is not the Final Destination
Facebook is a massive social media platform. However, what became the reason for the fall of the shares? The daily users of the platform dropped to 1.929 billion. For the first time in the firm’s history, Facebook’s customer base shrunk. The desire to relax after success is natural. However, success requires hard work, care, and regularity. This Facebook crash is a perfect example of temporary success if there is no constant care and construction. No matter what happens in life, positive or negative, nothing lasts forever. Accordingly, “this too will pass.”
Facebook Fail – Do not Put Everything in One Basket
Mark Zuckerberg put all his billions of eggs in one basket called Metaverse. The world is moving in the direction of meta-transversal; However, the approach by which he even changed the company’s name, thus expressing his readiness and openness in this direction, did not guarantee that the company would remain at the zenith of success.
Assess Market Participants Realistically
At one point, Steve Balmer laughed at the iPhone as soon as it was released and said that no one was buying Apple phones. Also, there were other search engine market leaders when Google was launched. Consequently, few thought it would ever succeed and become dominant in the market. Although Facebook was growing fast; The platform TikTok appeared, which attracted the attention of the army of social media lovers. It seems that Facebook does not yet consider TikTok a real threat.
Trust – the Most Valuable Weapon – Do People trust Facebook?
People do not trust Facebook. Especially since the company had several scandals last year, will it be a Cambridge analytics crisis, a renewal of the company’s privacy policy, or numerous other examples; Part of the people do not have a sense of security on this platform. It turns out that trust is an essential asset in business and is exponentially more important than anything else.
Innovation is Paramount
Facebook’s strategy has been pretty superficial over the years. Every time a competitor appeared, Facebook just bought them. They did this in the case of WhatsApp, Instagram, and very much wanted the same TikTok. When Facebook realized they could not buy TikTok, they changed their strategy and tried to copy them. Nowadays, Facebook, Instagram, Snapchat, YouTube, LinkedIn, and others, copy ideas from each other; Including stories and other features.
The thing is, there comes a time when users want the original rather than the copy. Facebook and Instagram tried to copy TikTok. However, it has not turned out so well; At least, the fact is that Meta is on the verge of collapse, and TikTok is becoming increasingly popular. The lesson is that innovation is significant for a company.
One of the reasons for the fall in Facebook shares is the fear of investors that the firm felt too comfortable owning the market. If nothing changes, the company may soon rejoin companies that have suffered a severe crash. These include Nokia and MySpace. They were once market leaders. However, today the reality is different. Consequently, the lessons learned above from the Facebook stock crash are a tremendous treasure trove to change things for the better.
