Home » How the Meta Miss Started a Cascade of Social Selloffs

How the Meta Miss Started a Cascade of Social Selloffs

Stocks are generally organized by sector.

For example, the S&P 500 is typically broken down into 11 different sectors.

These include, information technology, health care, financials, industrials and several others.

From there, stocks are organized further by subsector.

The information technology sector, for example, is broken down into software, consumer electronics, semiconductors and so on.

So, if an investor is thinking about purchasing a semiconductor stock like NVIDIA Corporation (NVDA), they would be smart to first see how the overall technology and semiconductor groups are performing.

Similarly, if an investor sees a potential opportunity setting in ConocoPhillips (COP), it would be a good idea to first check on how the energy sector is performing.

Why am I telling you all this?

Well, just take a look at what happened to social media stocks today…

Socials Sell Off

Meta Platforms, Inc. (FB), formerly known as Facebook, reported disappointing earnings numbers after the close of trading on Wednesday afternoon.

The stock tanked on the news, falling over 26% during Thursday’s session.

FB was a trillion-dollar company, which means over $250 billion in market value simply vanished overnight.

That’s not just bad for folks who own Meta stock.

The ripple effects were felt across the sector.

Other social media stocks like Pinterest, Inc. (PINS) and Snap Inc. (SNAP) sold off big as well.

Daily Performance Chart of Meta Platforms, Inc. (FB), Pinterest, Inc. (PINS) & Snap Inc. (SNAP) — Source: TC2000

SNAP fell over 20% as well… All because of a 4% earnings miss at a completely different company!

It sounds crazy. I know. But this is how the markets work.

Meta Miss

Now, we’ve been talking about the metaverse a lot lately.

I’ve told you that the metaverse could represent a $30 trillion industry in the making.

Mark Zuckerberg and Meta Platforms both understand this, and Meta will undoubtedly be a huge player in this space going forward.

However, like any burgeoning industry, there are going to be big ups and downs.

We saw one of those big down days yesterday, and there could be more.

But I think we’re going to see massive returns from the new metaverse sector stocks in coming years.

For now, remember that no stock or sector lives on a remote island disconnected from the rest of the market.

Markets are completely intertwined.

In a bull market, this phenomenon generally works to our advantage.

As the old adage goes, a rising tide lifts all ships…

But when things get ugly, that ugliness can spread just as easily.

Embrace the surge,

Ross Givens

Editor, Stock Surge Daily

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