The Meta platform's Mega drop

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?


Frankly speaking, Its surprising that they were able to show growth in daily active users till now. Its been years since many many of us have transitioned from Facebook to other apps.

One great thing with FB though is they have Whatsapp and Instagram as main drivers currently.

FAANMG Companies are betting big on Metaverse. But I’m frankly not sure.

What do you think about the business model of the company Tara ? @Tara

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I believe one of the major reasons was also reduction in the overall teen and young adults usage of facebook which started reducing since 2019 and a fall was anyway projected since then.

Nice post @Tara. While reading more about this, the below note from Finshots set up the context for me.

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The company provides its platforms to users for free, collecting data from them and allowing other businesses to run advertisements on it. They may be working on several things, but the main revenue is ads.

Every day, billions of people log into their platforms. I mean, I can’t think of anyone near me who isn’t on Instagram or using Whatsapp. Moreover, the ads are personalized. The ads are based on a user’s search history or recent interest right? That’s the main reason why businesses prefer digital ads over traditional ads. It saves time and money by ensuring that ads are seen by the right audience.

I guess after Google. Facebook and Instagram are the preferred platforms where businesses run advertisements.

Another reality is that, irrespective of whatever the company says about protecting privacy, data is everything to them. :slightly_smiling_face:

As you can see, ads make the most of their income. Other divisions, including Meta realty labs are yet to take off.

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Here’s a nice tweet thread on Meta platforms fall from Capitalmind.

That’s right, Meta’s lost market value is more than the total market cap of companies like Oracle, Cisco and nearly as much as the total value of Disney!
Source : Meta's market value just dropped by more than most companies are worth - CNN

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Although, Meta’s $232 billion fall is the largest one-day value drop in stock market history. Turns out Apple accounts for five of the 10 biggest one-day drops in the past 3 years. The previous record for the most amount of market capitalization lost in one day was Apple’s $182 billion loss in September 2020.



Meta Platforms Inc is no longer among the world’s top 10 most valued companies.

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