The big news you’ll see is Facebook/Meta Platforms. Because of the poor quarter results, it’s trending all over the internet. The company is a part of FAANG and FAAMG. Now trading at nearly $238 per share, the stock is down more than 20%.
Here’s the Meta Report for the Fourth Quarter.
One of those company to which investors gets emotionally attached. In reality, the market gives black-and-white data. If the company generates a profit, it will prosper and grow. Otherwise, the stock price will collapse. Any company that looks to be huge but has poor or no profitability is discounted by the stock market.
If you look at the Q4 finances.
Total revenue grew by 20%, from $28,072 to $33,671 billion. The disappointing part is that the operating costs have risen by 38% making a hit on the income.
For any analyst or investor, seeing revenue increase while total expenses climbed more than revenue, causing a blow to the company’s income, gives them a negative feeling.
Despite the fact that the platform’s daily and monthly active users are increasing. According to the company, the competition is increasing and users are moving their engagement from stories, feed, to Reels.
Probably Tiktok and other social networking apps. Which sorta makes reels and videos making it tough for the meta platforms.
Also, according to the insights, the total revenue represents 3-11% of YOY growth in the first quarter of 2022, which is one of the reasons why the company’s stock is short. Nobody likes single-digit growth.
Another point to notice is the AR/VR division. The Meta realty Labs, which develops VR headsets, 3D avatars, etc. The company’s financials show that it hasn’t witnessed much growth. Again, revenue increased by 877 billion dollars, while income was negative, down by 3.3 billion dollars.
Overall, the company’s costs seem to be increasing year on year, but its revenue from operations going flat.
Mukesh Bhai is now richer than Mark Zuckerberg.
Well, I know that not many of us will be affected by the Facebook price drop, but have you checked what’s going on? Do you think the company changed its business model from Facebook to Meta knowing the bad performance?