Meta share: minus 25 percent – shareholders punish Facebook group
Mark Zuckerberg’s Metaverse project swallows up billions in costs, with no advertising revenue. And the shareholders of the Facebook group are not enthusiastic about the current course. In the meantime, the Meta share lost around 25 percent of its value in the after-hours trading.
Mark Zuckerberg’s vision of the Metaverse can currently do one thing above all: eat up money. Overall, the future project increased the company’s overall costs by a fifth in the third quarter.
Advertising revenue is also falling. And as a news agency report Reuters looks like Wall Street and Meta’s shareholders are losing patience.
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In the meantime, the Meta share has lost around 25 percent of its value in after-hours trading. That dropped Meta’s market value by $67 billion after the company posted its fourth consecutive earnings decline.
In comparison compared to last year, the price has collapsed by more than 70 percent. Meta stock is now at 2016 levels.
Meta stock shows that doubts about the Metaverse are growing
Mark Zuckerberg’s vision of a metaverse seems risky. It takes a lot of imagination to imagine the success of the virtual space – and many investors lack that.
According to analyst Paolo Pescatore, given the economic crisis, it feels like a big gamble. In his opinion, the way there will also be long and painful.
Zuckerberg can hardly be talked into it at the moment. He holds special shares that grant him tenfold voting rights. He can therefore make all important decisions alone – even against the will of the shareholders.
Mark Zuckerberg defends his course
In a conference call after the announcement of the latest business figures, Jefferies analyst Brent Thill asked Metas executives to provide an explanation for the company’s course.
Zuckerberg responded that not focusing on the Metaverse would be a mistake. It is fundamental to the future of the company.
We are doing pioneering work that will lead to mature products at different rates and in different time frames over the next five to ten years.
First of all, no improvement in sight
To make matters worse, the Facebook group is not promising any improvement for the time being. In the coming year, total spending could even increase by up to 16 percent. Operating losses could also increase significantly.
This is especially true for Reality Labs – the entity responsible for creating the Metaverse. Last quarter, Reality Labs’ losses jumped to a whopping $3.67 billion from $2.63 billion a year earlier. In addition, revenue has almost halved.
Meta: Investors are demanding job cuts
Shareholders’ loss of confidence in Meta’s current course comes at a time when other tech companies like Microsoft and Google’s parent Alphabet are responding to the economy with job cuts. At Meta, however, the number of employees increased by 32 percent in the third quarter.
It is not the first time that shareholders are dissatisfied with the development of the Metaverse. Just recently, an investor criticized Zuckerberg in one open letter. The Meta CEO should spend less money on the Metaverse in the future and also save on personnel costs.
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