In just four hours, shares of Meta Platforms, the parent company of Facebook, Instagram, Oculus and Whatsapp, fell more than 20%, leaving some $67 billion of market value on the way.
The problem? Wall Street no longer trusts the successful outcome of the “metaverse experiment” announced by Mark Zuckerberg in 2021 and which has raised the company’s global cost by a fifth.
The results published this Wednesday, October 26, by Facebook were not positive, registering the fourth consecutive fall in quarterly profits.
To make matters worse, Meta said in its fiscal third-quarter report that it expects its spending to rise a further 16 percent in 2023 and that A good part of the losses will come from the hand of Reality Labs, the internal department in charge of carrying out the metaverse.
The Meta Platforms report is clear: “they will grow significantly” next year.
As the Facebook report was released, shareholders were calling Zuckerberg’s company’s investments “oversized, terrifying, confusing and baffling,” Reuters reports.
Goal: Q3 2022 results report.
Meta invests in metaverse, but losses worry
One of the questions addressed to Meta executives by market analysts summarizes the sentiment of investors: “Do you think that with the metaverse Facebook has too many experiments active at the same time and is leaving aside bets that are proven to be profitable? Why do you think the metaverse is profitable?
In the report released by the social media company this Wednesday, which covers July through September 2022, it is detailed that Reality Labs’ losses skyrocketed to $3.68 billion, compared to $2.62 billion for the same period. of 2021.
At the same time, income was cut in half.
Zuckerberg defended himself by saying that “it would be a mistake for Meta not to focus on these areas [el metaverso]because they are going to be fundamentally important for the future.”
“It’s true that many times, when launching a new product, people say: ‘You’re spending all this and you’ve only produced this thing?’, but I understand that that is not the way to analyze the metaverse”.
He also spoke of “cutting-edge work” that will eventually become “mature products” in “different time periods in the next 5 to 10 years.”
Zuckerberg also discussed the latest releases related to augmented reality and neural interfaces, such as a virtual and mixed reality headset, the $1,520 QuestPro, and a social metaverse platform.
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