In such uncertain and difficult times, all the big names are struggling, but Meta’s inability to maintain its customers’ portfolio share is worrying and keeping bettors at the expense of price cuts.
This isn’t the first time the social media giant has fallen behind, and that reflects the fact that the competition is fierce, with younger entrants like TikTok a serious opponent. “Meta’s platforms don’t have as much power over marketing teams as they should. Sophie Lund-Yates, Chief Equity Analyst at Hargreaves Lansdown commented on Meta’s results this way: The less-than-stellar quarterly results and uncertainties about the company’s future drove Meta’s shares down -8.8% in after-hours trading. We have no doubt that investors and others would happily support the increase in these investments as the becomes more tangible, albeit still in the long term.” “An estimated $ 100 investment in an unknown future is huge and terrifying, even by Silicon Valley standards.
In an eloquent letter to Mark Zuckerberg and the board of directors, Altimeter Capital CEO Brad Gerstner, an investor and partner in Meta and formerly of Facebook, peremptorily stated: Meta discounts the huge effort put into efficiency and research investments aimed at closing the gap with present-day opponents such as TikTok and those of the future such as The Nemesis and others, “an estimated $ 900 million in additional consolidation costs.”Ī loss of about $3.7 billion in Q3 was found from the Reality Labs Meta business, or the division responsible for the implementation and development of Zuckerberg’s metaverse. The metaverse group estimates last quarter total revenue of $30/32.5 billion. Nonetheless, the group’s platforms are increasingly being used to the point of reaching 2.93 billion users worldwide (+4%) year on year.Ĥ are the billions of additional expenses compared to 2021 largely due to a greater flow of resources into research and development, this resulted in operating profit declining by 45.7% to $5.6 billion. The average revenue from a social ad dropped by 18% and this translates into less money to invest and use for the giant’s ongoing expenses. The parent company of Zuckerberg’s social constellation is struggling on the income side and is setting as its next goal better revenue management to more calmly meet the challenges facing its businesses.Īdvertising revenue, which is the core business by which the US company monetizes, declined and consequently so did revenues, which fell 4% to $27.7 billion for the third quarter.
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