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Tonight: A reckoning for Big Tech. Plus: Your Amazon Prime bill is going up. Let's get into it.

By Allison Morrow

📉 FACEBONK

Lemme just check how my tech stocks are doing...

Facebook just had its worst day ever as a publicly traded company. Actually, it was one of the worst days ever for any American company. And it brought just about everyone else down with it.

The news: US stocks, snapping four consecutive days of gains, sank deep in the red Thursday, dragged down by a disastrous earnings report from Facebook's parent company, Meta. The stock fell more than 26% Thursday.

In other words: In a single day, Meta lost nearly $240 billion in market capitalization — an amount that exceeds most companies' total valuation. CEO Mark Zuckerberg, the company's largest shareholder, himself lost more than $30 billion.

Tech stocks dragged the Nasdaq down 3.7%. The S&P 500, the broadest measure of the US stock market, fell 2.4%. The Dow fared only slightly better, trading down 1.5%. (That's still a nearly-520 point drop.)

WHAT'S WRONG WITH FACEBOOK?

So, so much. But investors are freaking out for a few reasons:

Competition from TikTok. It's the one social media product Mark Zuckerberg has so far failed to rip off from a rival to make a copycat that people actually prefer. Instead he's made Reels, which is mostly just recycled TikToks.
A stagnant user base. Audiences are stagnating or dropping, and that's gutting Facebook's advertising business, which makes up around 99.5% of its total revenue.
A pricey bet on an as-yet non-existent virtual reality platform called the Metaverse, which is either the future of the internet, a deeply speculative digital land grab born out of our collective fear of genuine human connection, or an elaborate hoax designed to bilk Silicon Valley nerds out of their wildly undeserved fortunes (or all of the above). Meta is pumping cash into augmented virtual reality, and even Zuck admitted that the "path ahead is not yet perfectly defined."
Key quote: "We were struck by the magnitude of priorities the company is juggling concurrently (seven?), most of which do not appear likely to drive a near term improvement to the revenue outlook," said UBS analysts Lloyd Walmsley, Chris Kuntarich and Mary McKennon in a note to clients.

Other notable tech giants taking it on the chin:

PayPal continued hemorrhaging Thursday after a 25% drop Wednesday when it lowered its earnings guidance for 2022 and scrapped an ambitious plan to grow its user base.
Spotify reported a lukewarm forecast for its subscriber growth this quarter, sending its stock down nearly 17% Thursday.

It wasn't all doom and gloom:

Amazon shares had been down ahead of its earnings report, but rose 15% in after-hours trading on the news it was raising the price of its Prime subscription (more on that below). If those gains hold through Friday's close, it would be the biggest single-day gain in stock market history, Bloomberg reported.
Snap, the parent company of Snapchat, and Pinterest both bounced back after hours on better-than-expected earnings.

BIG PICTURE

After two years of eye-popping growth, tech stocks appear to be coming back down to Earth. Painfully. Investors are preparing for interest rates to go up, curbing their appetite for risk. That means companies like Facebook that have achieved lofty valuations are now under pressure to show there is real value underlying them. What will investors find when they put Silicon Valley darlings under the microscope? So far, a fair bit of disappointment.

#️⃣ NUMBER OF THE DAY

$139

Amazon is raising the price of its annual Prime subscriptions from $119 to $139 per year, the company announced in its earnings report. The reason? "Expanded Prime membership benefits," such as additional video content and free same-day shipping, according to Amazon. Of course, like many other companies, Amazon is protecting its margins by offsetting the rising costs of labor and transportation. The change will go into effect on February 18 for new Prime members and after March 25 for existing members.

💰 BILLIONAIRE BREAKUP

When Bill Gates and Melinda French Gates divorced last year, the pair set up something of a trial period for co-parenting their massive charitable foundation. For two years, at least, they'd try continuing their work as co-chairs. At the end of two years, should they decide to part ways, Bill Gates would essentially buy his ex-wife out.

(And you thought your last breakup was messy…)

Anyway, it remains to be seen how that will play out, but in the meantime there are signs of big changes inside one of the world's biggest philanthropic institutions.

The news: French Gates has decided not to give the bulk of her estimated $11.4 billion fortune to the Bill & Melinda Gates Foundation, according to a report from the Wall Street Journal, citing unnamed sources familiar with the matter.

To be clear: French Gates is still committed to giving away the vast majority of her wealth, in line with the Giving Pledge campaign she co-founded in 2010. But now, French Gates is expected to spread her donations out to other charitable endeavors beyond the foundation she launched with her now ex-husband.

"I recognize the absurdity of so much wealth being concentrated in the hands of one person, and I believe the only responsible thing to do with a fortune this size is give it away—as thoughtfully and impactfully as possible," French Gates wrote in a letter.

That news follows an announcement late last month that the foundation, which has a more than $50 billion endowment, named four new members to its board of trustees — the first outsiders ever to join the board — to help bolster governance in the wake of their divorce.

My colleague Jessica Korn has more.

RELATED: MacKenzie Scott donated $133.5 million to educational nonprofit Communities in School, an organization that helps students navigate issues inside and outside of the classroom. It's the largest unsolicited gift in the program's history.

WHAT ELSE IS GOING ON?

⚖️ Kaylen Barker, a Black woman who worked at a Tesla manufacturing plant, filed a lawsuit this week in California claiming that the automaker tolerates "rampant acts of racism" in its factories.

🐕 Wag, the dog-walking startup, is preparing to go public through a merger with a special purpose acquisition company, known as a SPAC, at a valuation of $350 million.

🛢️ US oil prices jumped above $90 a barrel on Thursday for the first time in more than seven years after OPEC and its allies declined to aggressively ramp up production.

👀 Look ahead: Friday's jobs report will shed light on how the Omicron variant affected America's economic recovery. The White House was already setting expectations for an "unusually low" number of jobs added.

TWEET OF THE DAY

ABOUT LAST NIGHT...

A quick correction: Some of you kindly messaged me point out that it is in fact six weeks of winter, not four, that is foretold by that charming vermin named Phil. I was wrong, though I think we can all agree it is still nonsense. Thanks for keeping me on my toes!