Investors in the parent company of Facebook and Instagram, Meta, have reduced its market worth by at least $80 billion, and as of Thursday, the firm’s shares had fallen by at least 23%. This is in response to the company’s third-quarter report, which revealed that earnings had decreased by 52% to $4.4 billion from $6.6 billion, although quarterly revenue had remained constant at $27.7 billion.
Additionally, Meta’s report on Wednesday showed a dip for the second consecutive quarter. Since the report’s publication, Meta’s share price has fallen by 25%, and as soon as the markets opened the following day, things got even worse as the price momentarily fell below $100, which was apparently the lowest since 2016.
The company’s primary source of revenue, advertising, have likewise reduced their expenditure amid a global economic slowdown.
Additionally, TikTok is apparently causing Instagram and Facebook’s parent business to lose daily active users for the first time.
According to media reports, Meta’s third quarter report also revealed an increase in spending of 19% over the same period last year, which was ascribed to its investment in the metaverse and the short-form video content offering Reels. While the company’s metaverse branch, Reality Labs, has posted a $3.7 billion loss during the last quarter.
‘Over time, these are going to end up being very important investments for the future of our business,’ said Zuckerberg when investors expressed concern over the losses faced. He added that while the company is facing ‘near-term challenges on revenue’ it has the fundamentals for a return to ‘stronger revenue growth.’
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