The Future. Meta faced its worst day ever yesterday, missing both its financial and subscriber targets and seeing over a quarter of value disappear as a result. It may just be growing pains for a company in transition from an outdated social platform to (trying to be) the face of web3… but until there is a meaningful metaverse product to push, the losses may only continue coming.
Slap in the Facebook
Is the Facebook era over?
- Meta (we’ll get used to saying it one day) saw its stock plunge 26%, wiping at least $200 billion of value from the company.
- The crash is the biggest one-day valuation drop for a stock in US history.
Why did it happen? Quarterly profits came in under expectations at $10.8 billion, Zuckerberg gave a worrying forecast that total earnings would also come in under expectations, and Facebook’s daily active users fell for the first time ever from 1.93 billion to 1.92 billion.
Zuckerberg also blamed Apple’s privacy changes, inflation, supply-chain issues, and users’ migration to lower revenue-generating features like Reels for the financial “hardships.”
In reality, all of this should have been expected. Zuckerberg knew that Facebook as a social platform had already peaked… which is why he rebranded the umbrella company to Meta, with the new ambition of becoming a metaverse company. That’s going to take time to build and reap the rewards, meaning that Meta is back in the growth stage.
To make that change happen, Meta is hiring like crazy and is investing heavily in its metaverse products (like Oculus VR headsets), which fall under the Reality Labs division (a big money-loser). You have to spend old money if you want to make new money.