![]() ![]() Meta has also reached out to Apple, though Meta has been given limited insight into its ecosystems. Apple requires app publishers to ask permission to collect data - much to the dismay of companies like Meta, whose business model is based on selling ads that are finely tailored to consumers' tastes and habits. Most importantly, the company had warned that targeted advertising rules imposed by iPhone maker Apple last year could have a negative impact on its financial results. We believe it is difficult to predict whether there will be a further regression in 2023.Īttacks from all sides, including the authorities In our view, we could see a decline in profits in 2022. ![]() However, we believe that the sharp increase in investment should not be developing the metaverse, as some believe, but artificial intelligence and privacy insights. The company indicated that users on Instagram, for example, were spending more time on "reels," a short video format inspired by competitor TikTok "that generates lower compensation rates" than traditional Instagram formats.Īt the same time, the company plans to increase capital spending by 60 percent. Meta said it is more difficult to get users' attention due to growing competition. Meta is projecting three to 11 percent revenue growth in the first quarter, 30 percent increase in costs, stronger competition from TikTok and young people exiting the platform. It was the most depressing quarterly earnings presentation I've ever seen. The company's shares subsequently fell more than 22 percent in electronic trading after the close in New York. However, that was not the cause of the shock and stock market crash. In early February, Meta presented its quarterly report, which turned out to be about as expected, showing a growth of 20 percent. In addition, Meta has struggled with changes to Apple privacy policies enacted in 2021 that undercut its primary advertising model – which the company predicted would cause it to lose out on a projected $10bn in ad revenue in 2022.Since the launch in the year of DNB Fund Technology, I have been following Meta, or Facebook as it was called not long ago, as co-portfolio manager. Google’s parent company, Alphabet, and Microsoft have also disappointed investors with third-quarter results. Meta and other tech companies have been hit by fears of recession and rising inflation. He added: “While we face near-term challenges on revenue, the fundamentals are there for a return to stronger revenue growth.” People are going to look back on decades from now and talk about the importance of the work that was done here.” “This is some of the most historic work we’re doing. “Over time, these are going to end up being very important investments for the future of our business,” he said. This was as a result of spending on the metaverse and on its short-form video-content product Reels.įaced with concern from investors about the losses, Zuckerberg said he was confident that spending on the metaverse and other “experimental bets” would begin to pay off. Meta’s costs and expenses climbed by 19% in the third quarter compared with a year earlier. It lost $230bn in market value in February in the biggest one-day loss in history for a US company, after its shares slumped by 26%. The company has invested heavily in new products that have so far failed to bear fruit. Meta’s results were the latest in a series of disappointing earnings reports. The company warned of weaker trading ahead.Īmid growing competition from TikTok, Meta is also suffering from a slowdown in advertising spend. The company reported $4.4bn profit for the same period, 52% lower than the $9.2bn it made a year earlier. Meta, which also owns WhatsApp, reported $27.7bn in revenue for the third quarter – higher than analysts’ forecasts – as sales shrank by 4% compared with the same period a year earlier. ![]() Reality Labs, the company’s metaverse division, made a $3.7bn loss over the past three months, while the company said it anticipated these losses would “grow significantly year over year” in 2023. His holding stood at just over $125bn at the start of 2022, according to Bloomberg data, but its value has now fallen to $35bn. With a 13% Meta stake, Zuckerberg has seen his net worth plummet by $90bn so far this year because most of his fortune is in the company’s shares. Meta’s shares briefly dipped below $100, taking them to their lowest level since 2016, with investors unconvinced by Zuckerberg’s bet that his company’s future lies in the metaverse, a virtual reality world that users will experience through its Oculus headsets. It was one of the most dramatic devaluations Wall Street has seen since investor confidence in Silicon Valley stocks began to crumble at the start of the year. The sell-off began during overnight trading after a downbeat results presentation, and continued when markets reopened on Thursday. ![]()
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