#Focus video products meta stock plunges full#

In a Wednesday conference call, Mr Zuckerberg said the company’s investments this year will focus on Reels - a TikTok-esque short form video service on Instagram - as well as messaging, advertisements, commerce, privacy, artificial intelligence “and, of course, the metaverse”. Whistleblower accuses Facebook of causing harm before UK Parliament Theoretically, the metaverse would be a place where people can meet, work and play using virtual reality headsets, augmented reality glasses, smartphone apps or other devices.ĭespite an enormous backlash to Facebook’s problems including misinformation, privacy mishaps, teenage mental health and hate speech, Mr Zuckerberg continues to believe that bold bets to steer the company in new directions have generally paid off. Mr Zuckerberg has described it as a “virtual environment” in which you can immerse yourself instead of staring at a screen. Think of the metaverse as the internet brought to life, or at least rendered in 3D. Since Meta took on its new name last fall, the company has been shifting resources and hiring engineers - including from competitors like Apple and Google - to help Mr Zuckerberg realise his vision. “The company has work to do to convince consumers that Meta’s expression of the metaverse is a good thing.” “There’s continued concern that Facebook’s past challenges will follow Meta into the metaverse,” said Mike Proulx, research director at Forrester Research. There’s also the inconvenient fact of Facebook’s continued difficulty in dealing with toxic real-world effects on its existing platform. While tech companies are accustomed to making big bets on futuristic-sounding ideas that sometimes become reality, Wall Street doesn’t like uncertainty. “Betting big on the metaverse isn’t a bad thing - the technology is set to be huge and provide a multitude of opportunities - but it will take at least another decade to really get going.” “Meta is sacrificing its core business model for its fascination with the metaverse,” said Rachel Jones, an analyst with the research firm GlobalData. A drop that big would be the largest ever for a single company on a single day.

Meta’s shares fell more than 23 per cent to $246.76 in afternoon trading on Thursday, lopping more than $215bn off the company’s overall value, known as its market capitalisation. Shares of the company formerly known as Facebook experienced a historic plunge on Thursday after the social media company reported a rare profit decline due to a sharp rise in expenses, shaky advertising revenue growth, competition from TikTok and fewer daily US users on its flagship platform.Īt the same time, it invested more than $10 billion in chief executive Mark Zuckerberg’s ambitious plan to transform Meta Platforms into a virtual reality - actually, make that “metaverse-based” - company.

#Focus video products meta stock plunges full#

To combat TikTok, Meta is building out its Instagram Reels product.Īt the same time, to position the company for longer-term growth, Meta is spending billions of dollars to build the metaverse, which is years away from its full potential and remains an unproven medium for the mainstream consumer.Meta is putting a lot of virtual eggs - and billions of dollars - into the metaverse basket, and Wall Street is pretty anxious about it. It's always hard to predict how deep or how long these cycles will be, but I'd say that the situation seems worse than it did a quarter ago,' Meta CEO Mark Zuckerberg said.īut aside from the macro economy, Meta is dealing with competitive pressures that have threatened its growth: the rise of TikTok and Apple's IDFA privacy change that opted-out iPhone users from app tracking. 'We seem to have entered an economic downturn that will have a broad impact on the digital advertising business. If Meta's third-quarter revenue falls within its guidance range, it would represent another decline in revenue. For the third quarter, Meta expects revenue of $26 billion to $28.5 billion, which fell short of the average analyst estimate for revenue of $30.5 billion.