Meta’s recent stock troubles began after Britain’s Competition and Markets Authority (CMA) blocked the acquisition of Giphy, a major GIF platform.
Shares of Meta Platforms Inc (NASDAQ: FB), formerly known as Facebook, slipped by 4.27% to $310.60 on Wednesday as the stock market went through a generally grim trading session. For instance, the NASDAQ Composite Index fell 1.83% to 15,254.05, while the Dow Jones Industrial Average dropped 1.34% to 34,022.04.
Wednesday’s development marked the second consecutive day of underperformance for Meta Platforms. In addition, the latest stock figure is also $73.73 less than the 52-week high of $384.33 that the multinational tech conglomerate achieved on September 1st.
Meta Stock Affected by the CMA
Meta’s recent stock troubles began after Britain’s Competition and Markets Authority (CMA) blocked the acquisition of Giphy, a major GIF platform. Meta reportedly paid about $400 million for Giphy in 2020 to potentially monopolize the platform’s suite of Graphics Interchange Format (GIF) images used for animated images.
Meta has not suggested that it plans to prevent or regulate Giphy access by rival social media platforms. However, CMA says that may change in the future. The UK competition regulator argues that Giphy coming under sole ownership of one social media platform might negatively impact overall GIF web supply. Furthermore, it also gives Meta conceivable leverage – should the company decide if or how other rival networks, including TikTok or Twitter, can use GIFs.
The CMA had earlier ordered Meta to put off buying Giphy during the earlier stages of the deal. This was so that the regulatory agency could properly review the situation and make an informed decision. However, Meta reportedly disregarded this, which resulted in a $70 million fine from the CMA. Furthermore, in a separate incident, the CMA also issued a fine of £500,000 to the company formerly known as Facebook. This time, the offense was changing its chief compliance officer twice without seeking necessary approval.
Meta Platforms says it will appeal the CMA’s decision to end its acquisition of Giphy. Nonetheless, the company has a four-week window to lodge such an appeal. Howeer, if Meta loses the appeal, it might have to sell Giphy for a lot less than it paid.
Meta Rebrand Comes as Much-Talked about Metaverse Begins to Take Center Stage All Around
Facebook announced its decision to rebrand itself to Meta Platforms in late October. The company felt that this was a strong way of signaling its intent to branch out. In addition, Meta is an attempt to show that the company has ties to several other disparate products. According to founder Mark Zuckerberg, the name Meta is a “better representation” of what his platform is working towards.
The metaverse, which is fast becoming popular everyday lingo, is a shared interconnected virtual universe. Existing parallel to real life, the metaverse allows people to interact with each other and other things in the universe. For the most part, this interaction uses tech aids like virtual reality (VR) and augmented reality (AR).
Tolu is a cryptocurrency and blockchain enthusiast based in Lagos. He likes to demystify crypto stories to the bare basics so that anyone anywhere can understand without too much background knowledge.
When he’s not neck-deep in crypto stories, Tolu enjoys music, loves to sing and is an avid movie lover.