November 27, 2022

Wire Service Canada

Complete Canadian News World

The goal of the confrontation: 9.4 billion smokes in the Metaverse in nine months

Nine billion, or rather 9.4 billion, in nine months. Many have lost Meta’s Reality Labs division, the heart of its turbulent and yet unverified tech and culture bet on the Metaverse, once accounting for third-quarter liabilities, which ballooned even further. And when similar doubts about the future are exacerbated by the difficulties of the present, with the landslide of this announcement continuing to drive business in the climate of the economic crisis advancing, the result is a real veritable storm: those in the deteriorating accounts of the social networking giant and digital universe of Mark Zuckerberg. Meta has been disappointed in the past three months and expects more slippage in the current fourth quarter.

title fall

Nothing made the stormy waters in which the Meta was sailing more evident than the reaction of the Exchange. The stock, crushed by pessimism, fell about 20% after the market. A crash adding to the 61% already lost since the start of the year – enough to scrap a 550 billion market cap – is what makes Meta one of the most punished tech leaders today, even if it’s under pressure after disappointing budgets, Alphabet and Microsoft also kicking off the season. Big Tech Quarterly on Tuesday, October 25th. At current levels, Wall Street’s Meta is at its lowest since March 2016.

Decreased profits and sales

Earnings and earnings have suffered for the past three months: earnings per share were $1.64 versus 1.89 forecast. Net profit fell by more than half (-52%) to 4.4 billion and operating profit fell by as much as 46% to 5.66 billion. Sales volume was only slightly better in appearance: it was 27.72 billion compared to the expected 27.38 billion. In fact, it was affected by the second decline in a row, a decrease of 4%, moreover, according to the company’s forecast, it will continue in the current quarter (I expected between 30 and 32.5 billion against 32.2 assumed so far). In the second quarter it had already fallen by 1 percent.

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Privacy and competition have a big impact

The pressures on revenue are compounded, today and tomorrow, by privacy restrictions on Apple devices (which limit ad targeting of companies like Meta) and competition from more fluid competitors like TikTok. Meta knew that under these conditions the average price of its ions fell by 18% versus an increase of 22% last year. Overall, advertising revenue, 98.2% of the total, at the same pace as group sales, declined 4% to $27.2 billion.

Still 2 billion daily users

Meta can still count on strengths, starting with an army of users. The average number of daily users of his social network Facebook reached 1.98 billion, while the monthly outperformed them slightly, 2.96 billion against 2.94. Instagram has 2 billion monthly users and WhatsApp has surpassed 2 billion users, with growth primarily in the strategic North American market.