![]() ![]() ![]() However, the roller-coaster ride isn’t for everyone, and Meta’s future is far from certain. Investors were pleased with the company’s new focus on efficiency, and they expect financial progress from the reduction in facility and payroll expenses. When Meta announced its fourth quarter and full year results, share prices went up by 20 percent. Whether that is true or not remains to be seen. In February, insiders told the Financial Times that additional layoffs are coming before the end of first quarter. The company decreased its global workforce by 13 percent – a total of 11,000 jobs. In the first trading session after the report was released, shares went down almost 25 percent, putting the price back at 2016 levels. The most significant drop in Meta’s stock price occurred after its third quarter earnings results were announced. They remained optimistic through October, but the worst was yet to come. Meta’s Reality Labs had an operating loss of $13.7 billion in 2022, and revenue went down by five percent – a big drag on Meta’s already-depressed top-line results.ĭespite these challenges, Meta shareholders remained hopeful that the stock would recover when the market moved back into bull territory. While the project may be a huge money-maker if and when the metaverse eventually matures, right now it is a strain on the rest of the business. Zuckerberg has poured resources into Reality Labs, the Meta subsidiary focused on building out a virtual world. Investors are growing concerned with CEO Mark Zuckerberg’s all-in bet on the metaverse. However, the biggest issue might have nothing to do with advertising. That was one of the most appealing features of advertising on Facebook, and the loss has advertisers rethinking where they invest their marketing dollars. For example, new privacy settings on Apple devices have drastically curtailed Meta’s ability to target ads to particular demographics. On top of that, Meta has run into a series of obstacles that are organization-specific. Unlike Meta, they aren’t overly reliant on a single source of income. Other large tech companies like Apple and Microsoft have a family of popular products and services. The ad revenue – or lack thereof – played an outsized role in the company’s 2022 difficulties. Understanding whether it is the right time to buy Meta stock begins with unraveling why it dropped so much more than its tech peers in 2022. That progress has continued into 2023, which has some investors and analysts wondering if now is a good time to buy Meta. Share prices started trending up in November 2022, but it was too late in the year to fully recover. In 2022, Meta stock went down roughly 65 percent. However, among the major tech companies, Meta was the biggest loser. Palantir, which held its IPO in 2020, dropped in excess of 40 percent of its value, as did Snowflake – another 2020 IPO. The NASDAQ, which is home to a higher proportion of tech stocks than other indexes, closed out 2022 down more than 30 percent.Īpple went down 20 percent over the course of the year, and Alphabet shares declined by more than 35 percent. The tech market’s downward spiral affected both established companies and start-ups, which came as a shock to seasoned investors. Those factors created industry-wide pressure on tech stock prices, and most tech companies lost a substantial portion of their value. They quickly sold off shares of higher-risk growth companies and bought recession-proof alternatives like consumer staples and energy. When the Federal Reserve elected to increase interest rates in an effort to rein in inflation, investors got anxious. Retailers responded by pulling back on marketing budgets, which impacted digital ad revenue – Facebook’s major source of income. Unfortunately, 2022 wasn’t kind to tech stocks, and Meta was hit particularly hard. It eventually peaked at more than $375 per share in September 2021. In the nearly ten years that followed its massive IPO, Facebook/Meta’s stock price went almost straight up. By that time, the social media platform had been in business for more than eight years, operating under the name Facebook. ![]() Is Now A Good Time To Buy Meta? When Meta held its IPO in May 2012, it broke records and set a new standard for tech startups. ![]()
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