- Mark Zuckerberg stated Wednesday that he is “pretty certain” Meta is moving in a “good direction.”
- After Meta’s third quarter earnings were below Wall Street’s expectations, and its stock plummeted 20%, he spoke out.
- Meta stated that it will continue to invest heavily in its metaverse project which is increasing its profits.
Mark Zuckerberg, Meta CEO, stated Wednesday that he is “pretty confident” that his company is moving “in a positive direction” after the stock plunged 20% due to a poorer-than-expected third quarter earnings report.
Zuckerberg spoke out after the publication of the report with analysts, saying that he’s been through several of these cycles and that he’s confident that this is moving in the right direction.Â
He added: “And while we continue to navigate some challenging dynamics – a volatile macroeconomy, increasing competition, ads signal loss, and growing costs from our long-term investments – I have to say that our product trends look better from what I see than some of the commentary I’ve seen suggests.”
Meta’s third-quarter net loss was catastrophic 52% year-on-year, to $4.4 billion, as R&D costs jumped 45% largely because of the company’s investments in the metaverse. Meta stock It fell to almost 20%After-hours trading Wednesday: $104.30 lowest level since 2016.
Investors are closely monitoring Meta’s metaverse investments to see if they are affecting the company’s core social media businesses like Instagram and Facebook.
Analysts wanted to learn more about Zuckerberg’s metaverse plans and engagement levels for TikTok competitor Instagram Reels as well as the company’s shrinking digital advertising revenues. Zuckerberg was interviewed on Wednesday’s earnings conference call.
Zuckerberg stated that Meta’s work on metaverse would be “historically significant.”
While he acknowledged that revenue is still below what he thinks it should be, a Meta spokesperson said that the company should see “healthier” revenue growth in the next year. Meta reported its second quarter 2022 revenue growth. first-everRevenue declined 0.9% year-over-year
Meta has split its business into two major segments. Reality Labs, which handles Oculus and everything metaverse-related, reported third-quarter revenue of just $285 million – a drop of almost half compared with the same period in 2021. The segment has lost $9.4 billion so far this year, including $3.7 billion in the fourth quarter – and Its expenses will “increase significantly” in 2023, Zuckerberg warned.
Brad Gerstner (whose Altimeter Capital fund owns Meta shares worth hundreds and millions of dollars) will be speaking Tuesday The social-media company was urged to reduce its metaverse investments and decrease its headcount by at most 20%. In an open letter, he stated that the company had “lost faith in investors”.
Meta’s social media segment net income also fell by more than 25% to $9.3B in the three months ending September 30. Zuckerberg claimed engagement was still high because of the fact that Facebook has more users than ever and WhatsApp is used by over 2 billion people every day.
Meta is cracking the whip at other departments as well, even though expenditure on metaverse projects will rise. Zuckerberg said that there has been an increase in scrutiny of all operating expenses. Reducing its office footprint.
Zuckerberg stated that Meta had stopped hiring certain teams. “shrinking” headcountOthers, with the company’s “highest priorities” being hired. He claimed that Meta had grown its total headcount by 28% in the last year to 87.314, and that he expects it to stay flat until 2023.
