Why Meta Stock Retreated Today

Shares of social networking star Meta Platforms (NASDAQ: META) tumbled 2.3% through 2:35 p.m. ET Friday afternoon on reports of troubles dogging its all-important advertising business, responsible for 97.5% of the revenue the company takes in, in a year.  

As tech news website The Information reports, Meta's success in ad-selling depends primarily on its ability to tailor ads to the "likes" and interests of its Facebook and Instagram users. But around the world, governments are clamping down on private corporations' use of such personally identifiable data. In the European Union, for example, citizens have been granted the right to tell companies they only want to see ads that consider their age, gender, and "general location" when choosing which of several possible ads to display to them.

Elsewhere, India and Brazil are named as two other countries considering enacting restrictions on use of personal data. Should these and other countries follow the tack the EU is taking, it could render much of the data that Meta regularly collects effectively unmonetizable, throwing the company's entire business model into question.    

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Source Fool.com