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3 Feb 2022
Facebook Parent Company Meta Inc.’s Shares Plummet by 22%
The Index Today
Shares of Meta Inc., the company that owns Facebook, WhatsApp and Instagram, dropped by 22.6% to $249.90 during after-hours trading, costing the firm $200 billion in valuation.
This plunge has been attributed to its dull fourth quarter revenue reports despite the Metaverse launch, coupled with its rising costs which have likely deterred investors. The Metaverse is slated to take virtual reality to new heights with its three-dimensional, stimulated version of an alternate universe.
Meta had pumped in over $10 billion in 2021 for its Reality Labs division that comprises augmented reality technology and VR headsets, which has contributed to its present decline in profits. Additionally, competition from other platforms like TikTok is also affecting the company’s revenue and market performance.
Meta’s Chief Operating Officer, Sheryl Sandberg told analysts during a conference call that labour scarcity, global supply chain problems, and premature holiday advertising demand have further strained the company’s advertising performance.
In addition to that, Apple’s recent policy changes which make it increasingly difficult for Meta to track people’s online behavior for the purpose of targeted advertising, have also hampered the company’s avenues for income. Raj Shah of Publicis Sapient contended, “The metaverse is a long way from being profitable or filling the gap in ad revenue after Apple’s policy change.”