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The Meta company also wants to grow in the future – but more modestly than before. This announcement caught investors off guard.
Meta is a money machine. Last year, the Facebook parent company made a profit of around 40 billion dollars. But that doesn’t impress investors. You look to the future, and it promises less lavish growth rates. Meta has revised its forecast for the current first quarter slightly downwards.
From January to March 2022, sales are expected to be just under $30 billion. Financial analysts had expected over 30 billion.
Disappointment spreads
Many investors sold the Meta share out of disappointment. The price fell by a fifth in after-hours trading on Wednesday. By the close of trading on Thursday, the stock had lost 26 percent. There are several reasons for the more modest growth prospects; above all the new data protection rules from Apple.
Legend:
CEO Zuckerberg relies on the “Metaverse” and his own Tiktok-style video app.
key stone
They make it difficult for Meta to personalize advertising messages for iPhone users. The advertising is less effective that way. And that keeps advertisers from running ads on Facebook. Then there’s the competition. Facebook has recently gained hardly any new users. The number of daily active users fell slightly.
High expenses for «Metaverse»
Meta CEO Mark Zuckerberg expressly justified this with the competition from the video app Tiktok. Meta is therefore working on its own such offer. And that costs. There are also high investments in the virtual reality business, especially for the development of the digital world “Metaverse”. Zuckerberg sees the future of his company there. The division is in the red.
And that’s not likely to change anytime soon. On the contrary: expenditure on research and development is likely to continue to rise.