“I don’t use Facebook. It’s for grandpas like you.”

This observation, accompanied by a mocking eye roll, came over the weekend from the teenage daughter of a neighbor. In the wake of Facebook’s plunge last week, I sought anecdotal insights about the social media platform’s appeal (or lack thereof) for youngsters. I got my answer…in blunt terms.

Following a disappointing earnings report that revealed a slowdown in Meta Platforms (NSDQ: FB) growth, the share price of the Facebook parent tanked by 26% Thursday, erasing $252 billion in market capitalization.

How bad was Meta’s carnage? It was the sharpest single-day drop in market capitalization in U.S. corporate history. As the following chart shows, mega-cap tech names have led the way in valuation plunges in recent years, underscoring the riskiness of highly valued, momentum “story stocks” in the tech sphere:

Facebook talks a good game about leading-edge forays, but many of the company’s pronouncements smack of corporate spin that’s dutifully regurgitated by fawning analysts. I remain skeptical about the “metaverse” concept.

Investors are getting spooked by market volatility and high valuations; many of them have unfriended FB stock as the company’s operating results show inherent weaknesses. It didn’t help that, in the most recent quarter, Facebook reported a decline in users for the first time in its history.

Facebook lost about half a million global daily users in Q4 2021 compared to the previous quarter. Teenage users of the Facebook app in the U.S. have declined by about 13% since 2019 and are projected to drop a whopping 45% over the next two years.

Facebook is increasingly the domain of graying people like me (I plead guilty to using Facebook to brag about my grandchildren). Video-focused apps such as TikTok are stealing away the kids. Facebook’s loss of users and aging demographic are red flags for the future profit potential of its advertising.

Read This Story: Facebook’s Plunge Sets Stage for Sector Rebound

Other tech stocks, though, have bounced back from their January swoon. The major equity benchmarks closed last Friday with gains for the week:

The tech-heavy NASDAQ was in the forefront last week, fueled by a positive earnings report from Amazon (NSDQ: AMZN).

Lifting stocks has been good news on the jobs front. The Labor Department reported Friday that nonfarm payrolls soared by 467,000 in January, far exceeding the 150,000 consensus estimate of analysts. The unemployment rate edged higher to 4%.

The leisure and hospitality industry led January’s gains; professional and business services and retail also posted impressive numbers. Wages surged, rising 0.7% for the month and 5.7% for the year. Huge revisions boosted the November and December totals by 709,000.

U.S. unemployment has fallen to almost pre-pandemic levels. To be sure, rising inflation has been eroding purchasing power, but real income has risen for most adults. What’s more, the latest statistics from Johns Hopkins show that the Omicron variant is waning, and U.S. gross domestic product projections are healthy.

Also keep in mind, history shows that volatility initially spikes when a Federal Reserve tightening cycle is first announced, but tends to subside as investors digest the news and start to calm down.

The doom-and-gloom patrol…

So why are so many Americans gloomy about an essentially expanding economy? Partisanship in the media plays a big role; some networks continue to accentuate negative factors beyond all proportion. From their coverage of the economy, you’d think we were living in a dystopian hellscape.

Consumer sentiment has slumped, but I expect it to eventually catch up with the reality of a growing economy. I also expect inflation to moderate in the coming months, as interest rates rise and supply chain imbalances get sorted. Meanwhile, Facebook’s downdraft has put solid tech stocks on the bargain shelf. It’s an ill wind that blows no one any good.

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John Persinos is the editorial director of Investing Daily.

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