logologologologo
  • Home
  • Business
  • Markets
  • Exchange
  • Investment
  • Personal Finance

Investors punish Zuckerberg as costly metaverse pitch falls flat

Wall Street is losing patience over Meta boss Mark Zuckerberg’s enormous and experimental bets on his metaverse project that helped drive up the company’s overall costs by a fifth in the third quarter.

Investors rushed to dump Meta Platforms Inc’s stock after hours, pushing it down 20% and wiping $67 billion off its market value after the company posted its fourth straight decline in quarterly profit.

The Facebook-parent said its overall expenses could rise as much as 16% next year and anticipates that operating losses at Reality Labs – the unit responsible for bringing the metaverse to life – “will grow significantly” next year.

One Meta shareholder had recently voiced concerns calling the company’s investments “super-sized and terrifying”. Analysts on Wednesday called them “confusing and confounding” and Meta’s inability to cut costs “extremely disturbing”.

On a post-earnings conference call, Jefferies analyst Brent Thill asked executives: “I think kind of summing up how investors are feeling right now is that there are just too many experimental bets versus proven bets on the core … I think everyone would love to hear why you think this pays off.”

In the July-September quarter, losses at Reality Labs ballooned to a whopping $3.67 billion from $2.63 billion a year earlier. Revenue nearly halved.

“It would be a mistake for us to not focus on any of these areas that will be fundamentally important to our future,” Zuckerberg said on the call.

“I know that sometimes when we ship a product … people say: ‘Hey, you’re spending all this money, and you’ve produced this thing,’ and I think that’s not really the right way to think about it.”

“…we’re doing leading work that will become … eventually mature products at different cadences in different periods of time over the next five to 10 years.”

He spoke about the company’s various efforts, including a recently unveiled virtual and mixed reality headset called Quest Pro that is priced at $1,500 and a social metaverse platform where people can express themselves via avatars.

He said Meta is investing in two other areas: augmented reality and neural interfaces.

BIG GAMBLE

“The metaverse … feels like a one big gamble given the economic crisis,” said Paolo Pescatore, an analyst at PP Foresight, adding that the journey ahead was going to be “long and painful”.

“People are not rushing out of their seats to buy a VR headset or even watch 360 degree videos … The new device still feels like an expensive toy,” he said.

At a time when other tech companies such as Microsoft and Google-parent Alphabet are cutting jobs or slowing hiring, Meta’s headcount surged 32% in the third quarter from the end of the second.

In an open letter to Zuckerberg on Monday, Meta shareholder Altimeter Capital Management called on Meta to streamline by cutting jobs and capital expenditure.

The fund suggested Meta cap annual investments in the metaverse to $5 billion instead of the current $10 billion.

Related posts

March 29, 2023

Memory chipmaker Micron expects revenue drop, expects AI to boost sales in 2025


Read more

Categories

  • Business
  • Car
  • Content
  • Crypto
  • Economy
  • Exchange
  • Inflation
  • Investment
  • Markets
  • Personal Finance
  • Technology
  • Uncategorized

Archives

  • March 2023
  • February 2023
  • January 2023
  • December 2022
  • November 2022
  • October 2022
  • September 2022
  • August 2022
  • July 2022
  • June 2022
  • May 2022
  • April 2022
  • March 2022
  • February 2022
  • January 2022
  • December 2021
  • November 2021
  • October 2021
  • September 2021

Recent Posts

  • Memory chipmaker Micron expects revenue drop, expects AI to boost sales in 2025
  • Apple launches ‘Apple Pay Later’ buy-now, pay-later program
  • US regulator goes after Binance in newest crypto clash
  • A bank crisis brings an old favorite back for traders: Morning Brief
  • SVB hearing, consumer confidence, quarter end: What to know this week

About Us

The Alpha Cut a Vida Street LLC Company
1404 N. Ronald Reagan Blvd.
Suite 1120
Longwood, FL 32750

Link

(843) 256-4375
https://thealphacut.com

Why Us

Terms & Privacy
Policy & Procedure
Disclaimer

This material is not an offering, recommendation, or a solicitation of an offer to buy or sell the securities mentioned or discussed, and is to be used for informational purposes only.
Any performance results discussed herein represent past performance, not a guarantee of future performance, and are not indicative of any specific investment. Due to the timing of information presented, investment performance may be adjusted after the publication of this report. There can be no assurance that the future performance of any specific investment, investment strategy, or product made reference to directly or indirectly in this communication will be profitable, equal any corresponding indicated historical performance levels or be suitable for your portfolio.
All data in this communication is provided for informational purposes only and is not intended for trading or investing purposes. We expressly disclaim the accuracy, adequacy, or completeness of any data and content provided by financial exchanges, individual issuers, their respective affiliates and business partners and shall not be liable for any errors, omissions or other defects in, delays or interruptions in such data, or for any actions taken in reliance thereon. You agree not to copy, modify, reformat, download, store, reproduce, reprocess, transmit or redistribute any data or information found herein or use any such data or information in a commercial enterprise without obtaining our prior written consent.
We make no express or implied warranties or representations and shall have no liability whatsoever with respect to any data contained herein. The data may not be further redistributed or used to create indices or other financial products. This report and the views expressed herein are subject to change at any time based upon market or other conditions (such as domestic and global economic trends) and are current as of the date of publication hereof. The information, analysis, and opinions expressed herein are for general information only and are not intended to provide specific advice or recommendations for any individual or entity.
We emphasize that Investment in the securities of smaller companies can involve greater risk than is generally associated with investment in larger, more established companies, and can result in significant capital losses that may have a detrimental effect on the value of your investments.
Forecasting represents predictions of market prices and/or volume patterns utilizing varying analytical data. It is not representative of a projection of the stock market, or of any specific investment.
Nothing contained in this material is intended to constitute legal, tax, securities or investment advice, nor an opinion regarding the appropriateness of any investment. The general information contained in this publication should not be acted upon without obtaining specific legal, tax and investment advice from a licensed professional.
Please remember that all investments carry some level of risk, including the potential loss of principal invested. They do not typically grow at an even rate of return and may experience negative growth.As with any structuring of a portfolio of investments, attempting to reduce risk and increase return could, at certain times, unintentionally reduce returns.
The information, analysis and opinions expressed herein are for general, impersonal information only and are not intended to provide specific advice or recommendations for any individual entity.

copyright © Alpha Cut 2021. All Right Reserved
The Alpha Cut a Vida Street LLC Company