Meta’s Shares Plummet With Its Profit Being Cut by Half

Virtual reality, according to Mark Zuckerberg, is the new frontier that will propel Facebook's expansion. However, there hasn't been much of it thus far. Additionally, the value of Meta's shares has plummeted, while revenues and profitability are also declining. On Wednesday, things got worse as the company, now called Meta, gave investors an update on the three months that ended in September. Sales decreased by 4% to $27.7 billion from a year ago, while profits halved. Furthermore, the corporation, which also owns Instagram and WhatsApp, is having trouble as companies lower their advertising budgets in the face of the uncertain economic climate, changes to Apple's privacy settings reduce the effectiveness of their targeted ads, and competitive competition from TikTok is intensifying. In addition, nearly twenty years after Zuckerberg established Facebook, the company still faces "near-term challenges." Moreover, Zuckerberg mentioned job layoffs and said the company was concentrating on improving its efficiency, hinting that it would be a "smaller organization" next year. "There are a lot of things going on right now in the business and in the world," he remarked. "We're going to resolve each of these things... I think those who are patient and invest with us will end up being rewarded." What's more When Meta disclosed in February that it lost daily users for the first time ever, investor confidence plummeted. Then, in July, the company recorded its first quarterly revenue decrease as businesses slashed their advertising budgets in response to the gloomy economic outlook. In addition, Meta's shares value decreased by hundreds of billions as a result of shares of the company trading about 60% below where they did at the beginning of the year. In after-hours trading, they fell another 15% as executives urged investors to wait for a recovery in the broader economy. According to Insider Intelligence analyst Debra Aho Williamson, the company's current business situation leaves it on "shaky legs." On another note, Meta made nearly $4.4 billion in earnings in the three months that ended in September, and it successfully resisted a user decline. Additionally, the number of daily users on one of Meta's platforms increased from 2.88 billion in the previous quarter to 2.93 billion in the three months that ended in September, according to the company. And even if the US and Europe are not adding new users to the primary Facebook network, it is nevertheless expanding globally. However, despite its advantages, many investors worry that the corporation has become disoriented. "Meta has drifted into the land of excess — too many people, too many ideas, too little urgency. This lack of focus and fitness is obscured when growth is easy but deadly when growth slows and technology changes," investor and Altimeter Capital CEO Brad Gerstner urged the company in an open letter this week. In addition, he urged Meta to reduce staff and cut back on investments in artificial intelligence and virtual reality, or the "metaverse." More details In recent years, Facebook's costs increased as a result of concerns about how it handled the spread of false material on its platform and user privacy. The company announced that it was "making significant changes across the board to operate more efficiently" and that it intended to maintain a flat headcount during the following year. And after payrolls soared from roughly 17,000 at the end of 2016 to more than 87,000, rising 28% just in the last year, that would be a significant shift. However, it issued a warning that losses at its Reality Labs division, which specializes in virtual reality and suffered a sharp decline in revenues, were likely to increase. But, despite the doubters and the decrease in Meta's shares value, Zuckerberg still remains dedicated to the idea. "I get that a lot of people might disagree with this investment but from what I can tell I think this is going to be a very important thing," he said.