One of those is virtual- and augmented-reality hardware, a suite Meta calls the “metaverse.” The company spent more than $10 billion to build its hardware division, called Facebook Reality Labs.
Many investors are bailing on the stock because some of Meta’s recent launches have either misfired or performed below expectations.
Losses were highest in Africa, Latin America and India - a sign that the social media giant might have already reached its peak globally. Users fell by half a million to 1.93 billion logging on daily, The Washington Post reported. Even more alarming: Facebook lost daily users for the first time in its 18-year history during the quarter. The company’s Q4 earnings came in below estimates. There hasn’t been a ton of cheery news for either Meta or its investors lately. See: Facebook Name Change Boosts Metaverse-Focused Cryptos Such as Manaįind: In 2021, Facebook Joined $1 Trillion Club, Changed Its Name & Much More Zuckerberg, Facebook’s co-founder and Meta’s CEO, owns almost 13% of the company, which recently rebranded as Meta Platforms. The plunge reduced Meta’s market cap by roughly $200 billion, which is also a record. Meta’s share price tanked 26% to close at $237.76 on Thursday following a disappointing fourth-quarter earnings report - the stock’s lowest point since last summer and the company’s biggest single-day decline ever. Musk lost $25.8 billion from his net worth last week, according to Bloomberg. The record holder is still Tesla CEO Elon Musk, who saw his personal wealth tumble by $35 billion in November after tweeting that he might sell 10% of his Tesla stake. The $29.8 billion Zuckerberg lost represented the second-biggest single-day loss in history, CNBC reported. See: Facebook’s Crypto Dreams May Be Dead as Stablecoin Plan Dissolvesįind: Facebook Is Hemorrhaging Young Users - Is It a Warning Sign To Sell the Stock? The guidance of Meta does not leave a great expectation in return since they claim to significantly increase the expenses on Reality Labs next year.įrom my point of view, Meta is working on a great technology that could revolution our methodology of task performance in multiple sectors but that does not mean that they should put all their efforts on this track.Thursday’s stock market was one big sad emoji for Mark Zuckerberg and other shareholders of Facebook parent Meta as the company’s stock price went into a record-breaking plunge that reduced Zuckerberg’s personal wealth by nearly $30 billion in a single day. On the uncertain environment that we are currently living along with inflation and volatility in markets (Forex,Crypto,Stocks) investors are performing more conservative actions. In consequence, investors wonder how much Meta trusts the viability of their goal. The Facebook parents ad model 'just doesnt cut the mustard anymore,' the venture.
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The issue is not the debt, which it ends up being a useful financial tool for companies who know how to profit their benefits, the matter is that it is the first bond debt that they take. Metas one-day 230 billion wipeout in market value Thursday didnt shock Reddit cofounder Alexis Ohanian. I bet you said it out loud already! Yes, they were capable of doing this by taking debt, specifically $9.9 billion in long-term debt. Anyhow, the big question would be “If the revenue/income is decreasing as expenses are increasing, how can Meta afford this increase on property and equipment?” With these results it is not very pleasant to realize that they have increased their expenses on property and equipment over 50% reaching the quantity of $9.3 billion. Perhaps, this is not the expense in which investors may be more worried about since Reality Labs has spent $3.6 billion in just one quarter, last but not they have decreased their revenues from Reality labs by 49% Everything must be paid Compared to last year’s quarter there has been an increase of $2.8 billion. On the other hand, the escalation of expenses on research and development has not provided a healthy scenario neither. We could then assume that the reduction of net profits of the company is one of the factors that has altered the stock price. The net income of Meta has decreased by 52% compared to the third quarter of 2021, this has created uncertainty over investors regarding Meta’s short-term profitability. What has happened to Meta? Why did these results affect that drastically to the stock price? The seek of innovation has led them to a risky situation in which they are betting their future on the Metaverse. The Meta stock crash is heavily impacted by rising interest rates as interest payments on their debt increases and the economic environment becomes tighter. The consequences of this report have been significant for the enterprise, as their stock has decreased over 25% after the release. (Nasdaq: META) reported their financial results for the third quarter.
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