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How privacy policy of iPhone impacted Meta (Facebook) stock by 50%?

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Last year, Apple announced huge changes to its privacy policy. This gave iPhone users a lot of control of their data. Due to this, Meta stock and earnings dipped by around 50%.

But, why did this happen? To understand this, let’s try to understand the concept of cookies.

  1. Cookies are small pieces of text sent to your browser by a website you visit. They help that website remember information about your visit, which can both make it easier to visit the site again and make the site more useful to you. Cookies are also of two types: first-party cookies and third-party cookies.

  2. First-party cookies are the cookies that the website you are on stores to help populate the information when you again come back on the website like username etc. Third-Party cookies are the cookies that are stored by the ad servers - Meta.

  3. Every eCommerce website generally has an integration with Meta to record the things you search for. A part of the code of these ad-servers gets executed whenever you shop for an item or click on it.
    These websites generally do this so that they can re-target you in the future using Facebook/Instagram Ads.

  4. The new Apple IOS update disabled Third-party cookies which became a big issue for Meta and also eCommerce websites that depend on this data to sell your products.

  5. eCommerce websites started seeing bad results with their Facebook ads. They started losing money for ads and not getting good impressions or click-through rates.

  6. This caused them to move away from Meta which in turn led to declining in revenue of Meta and hence the stock dip.

Benjamin QoChuk, PhD

Benjamin QoChuk, PhD

Benjamin QoChuk is a Computer Science Researcher, Inventor and Author. His educational background include Bachelors at Vanderbilt University and PhD in Computer Science at Peking University.

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How privacy policy of iPhone impacted Meta (Facebook) stock by 50%?
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