The parent company of the social networks, Meta (Facebook) has suffered a loss of $13.7 billion due to its investment in the metaverse, and this is making investors impatient.
Watcher Guru, a vigilant observer of the financial world, tweeted yesterday about Zuckerberg’s flop with these words:
“JUST IN: $META (Facebook) metaverse division lost $13.7 billion in 2022.”
Mark Zuckerberg’s Metaverse (Meta) lost $13.7 billion last year is what emerged from CNBC’s breaking news about the company’s accounts.
Reality Labs, Meta’s engineering division of the Metaverse brought home an operating loss of $4.28 billion in Q4.
Mark Zuckerberg, the creator of Facebook, believed early on that the Metaverse was the company’s future and invested large sums in the project, which, however, are costing investors dearly as they are still not seeing the hoped-for return.
A year ago Facebook changed its name to Meta also visually charting the future of the company.
The Metaverse is now by all accounts going to be the agora of the future but for now it is proving to be a black hole absorbing the investments of Zuckerberg and co. without returns.
Reality Labs comes out of the earnings report with broken bones.
It notes that although it generated $2.16 billion last year ($727 million in Q4), profits are down sharply from 2021 ($2.27 billion).
The division that deals with the development of the metaverse seems to be in sharp decline.
Investments are six times as much as what is collected, and this definitely needs to change.
According to Predictions, Reality Labs lost a whopping $4.36 billion in the last quarter.
In this context it is worth noting Treasury yields are down sharply.
The technology sector in the stock market benefited from this situation before the close of yesterday’s session.
In the afterhours, Meta was in bull trend because of the earnings per share figure that far exceeded analysts’ expectations despite what has been stated in the past.
Another good news was the announcement of the $40 billion share buyback program.
Semiconductors are becoming available again in large quantities, which meant that the technology sector was able to breathe a sigh of relief.
ANZ Research expressed it this way:
“The positive market reaction reflects traders’ relief that there hasn’t been a hawkish reaction to the recent easing in financial conditions.”
Meta Platforms, parent company of Facebook, Instagram and WhatsApp unveiled a tearful quarterly report except for earnings per share.
The communications company’s earnings per share came in at 8.13%.
Whether because it had already been predicted by the market or because of a decidedly unexpected earnings per share, the quarterly report was well received and today Meta is not lagging in trading.
Zuckerberg’s company on the Stock Exchange touches €136.14 per share, in slight decline (-0.015%).
Meta is sharply limiting corporate costs thanks to a spending review that resulted in substantial layoffs and savings of $4.2 billion.
Personnel was not the only cost item sacrificed; some offices and data centers also suffered considerable cuts with it.
Meta CEO and founder Mark Zuckerberg said the following:
“Our community continues to grow and I am pleased with the strong engagement in our apps. Facebook just reached the 2 billion daily active milestone. The progress we are making on our AI discovery engine and Reels are the main drivers of this. Beyond that, our management theme for 2023 is the Year of Efficiency and we are focused on becoming a stronger and more agile organization.”