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Facebook is in a world of hurt as Meta Company shares fall 2022

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Facebook is in a world of hurt as Meta Company shares fall. Facebook’s parent company Meta reported Wednesday that its revenue fell for the second quarter in a row, hurt by declining ad sales as it faces competition from TikTok’s wildly popular video app.

The quarter’s weak results raised new questions about whether Meta’s plan to spend $10 billion per year on the Metaverse — a concept that doesn’t yet exist and probably never will be — is prudent. While its main source of revenue has been faltering.

Meta Platforms’ quarterly results sent its stock down 19% to $105.20 in after-hours trading. If the sell-off continues during the regular trading day on Thursday, it will be the lowest since 2016. On Wednesday the stock closed down 61% for the year.

Google parent Alphabet Inc. this week after disappointing meta results. And Microsoft reported weak earnings. The Menlo Park, Calif., company earned $4.4 billion, or $1.64 per share, for the three-month period ended Sept. 30. That’s down 52% from $9.19 billion, or $3.22 per share, in the same period a year ago. Analysts were expecting an average profit of $1.90 per share, according to FactSet. Revenue fell 4% to $27.71 billion from $29.01 billion, slightly higher than the $27.4 billion that analysts had predicted.

Google parent Alphabet Inc. this week after disappointing meta results. And Microsoft reported weak earnings. The Menlo Park, Calif., company earned $4.4 billion, or $1.64 per share, for the three-month period ended Sept. 30. That’s down 52% from $9.19 billion, or $3.22 per share, in the same period a year ago. Analysts were expecting an average profit of $1.90 per share, according to FactSet. Revenue fell 4% to $27.71 billion from $29.01 billion, slightly higher than the $27.4 billion that analysts had predicted.

Meta Company shares fall

Meta Company shares fall
IMAGE SOURCE BY moneycontrol

Some investors in the company are concerned that Meta is spending too much money and misleading people by focusing on the Metaverse, a virtual, mixed, and augmented reality concept that few understand – while it stems from a weak advertising business. also struggles.

“Meta Company shares fall has gone into extra land – too many people, too many ideas, too little urgency,” Brad Gerstner, CEO of Meta shareholder Altimeter Capital, wrote in a letter to Meta CEO Mark Zuckerberg earlier this week. “This lack of focus and fitness is obscured when evolution is easy but fatal when development is slow and technology changes.”

In addition to a sharp drop in revenue, Meta also forecast weaker-than-expected sales for the current quarter, raising concerns that the decline in revenue is more a trend than a deviation. “While we face near-term challenges on revenue, there are fundamentals for a return to strong revenue growth,” Zuckerberg said in a statement. “We are approaching 2023 with a focus on prioritization and efficiency that will help us navigate the current environment and emerge as a stronger company.”

Meta said it expects staffing levels to remain the same as in the current quarter — a departure from previous years’ double-digit workforce growth. As of September 30, the company had approximately 87,000 employees, an increase of 28% year-on-year. “To return to strong growth, Meta needs to transform its business,” said Insider Intelligence analyst Debra Aho Williamson. “As Facebook Inc., was a revolutionary company that changed the way people communicate and the way marketers interact with consumers. Today it is not that innovative groundbreaker.”

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