Zerodha co-founder Nikhil Kamath said the decline in daily active users of Facebook was a natural consequence of the tech firm’s unprecedented growth.

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Facebook owner Meta witnessed the biggest single-day slide in market value for a US company when its shares plummeted 26 percent on Thursday after the company issued a dismal forecast.

“It’s an unrealistic expectation for the platform to gain users at the same momentum indefinitely,” Mint quoted Kamath as saying.

Meta CEO Mark Zuckerberg, who owns about 12.8 percent in the tech behemoth, lost $29 billion in net worth and is now worth $85 billion, according to Forbes. The huge drop erased over $200 billion from the social media giant’s market capitalisation.

According to a Reuters analysis of Refinitiv data, Thursday’s slide was the biggest in the market value for a US public company.

Amid rising competition from China’s video-sharing platform TikTok, Meta, formerly known as Facebook, for the first time saw a decline in daily active users from the previous quarter.

“It's clear that there are many big roadblocks ahead as Meta faces tough new competition for ad revenue such as TikTok," Reuters quoted Insider Intelligence analyst Debra Aho Williamson as saying.

However, Kamath says competing apps negatively impacting growth cannot be the only reason for Facebook’s slow user growth, especially in India. “In a country where their most prominent competitor TikTok is banned, we've still seen slower growth, so I wouldn't say that's the only factor by any measure," he said.

In terms of users, India is the largest market for Facebook, Kamath said, adding that it was obvious that India would play a “major role in how this plays out for the global market.”

The social networking platform saw a slower user growth in India in the quarter ended December 31, 2021 on the back of an increase in data package pricing, Meta CFO Dave Wehner said.

During the December quarter, telecom firms Vodafone Idea, Bharti Airtel and Reliance Jio had hiked their mobile service rates by 18 to 25 percent.

According to Kamath, even though there may be a correlation between hiked telecom prices and Facebook’s slower user growth, “it cannot possibly be the largest attributing factor."

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(Edited by : Thomas Abraham)