NEW YORK (AP)
Shares of parent company Facebook Meta are in the middle of their worst day ever on Thursday after the social media giant reported a rare drop in profits due to a sharp increase in costs when it comes to investing. strong on transforming into a virtual reality-based company.
Shares of Meta fell more than 23% to $246.76 in early trading Thursday, taking away more than $200 million of the company’s overall value, known as its market capitalization. A drop this large would be the largest ever for a company in a single day. Facebook’s market capitalization fell by $120 billion on July 26, 2018.
The Menlo Park, California-based company on Wednesday said profits fell 8% to $10.29 billion for the final three months of 2021. Revenue rose 20% to $33.67 billion.
The drop can be partly attributed to Meta’s spending on the Reality Labs segment – which includes augmented reality headsets and headsets. Meta has invested over $10 billion in this segment by 2021.
Additionally, Apple’s recent privacy changes make it harder for companies like Meta to track people for advertising purposes, which also puts pressure on the company’s revenue. On a conference call with analysts on Wednesday, Meta’s chief financial officer said the company faces a “headwind” of $0 billion from Apple’s changes in 2022. Analysts at MoffettNathanson, in a note to clients, called the estimate “excellent.”
Meta also forecast revenue that was much lower than analysts’ expectations for the current quarter, in part due to increased competition from TikTok, the company said.
Meta Platforms Inc. adopted its new name last fall to emphasize CEO Mark Zuckerberg’s focus on the metaverse. Since then, the company has shifted resources and recruited engineers – including from competitors like Apple and Google – who can help realize his vision. It expanded its workforce by 23%, ending the year with 71,970 employees, mostly in technical roles.
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https://www.winknews.com/2022/02/03/meta-formerly-facebook-faces-historic-drop-as-stock-tanks/ Meta, formerly Facebook, faces historic drop as stocks rise