Yesterday, Meta became the latest Big Tech company to post rough third-quarter earnings. As a result, shares of the internet giant plunged 24% this morning, trading under $100 at market open, the lowest price since 2016.
The company reported quarterly revenue of $27.7 billion, a decline of more than 4% year over year and its second straight quarterly decline. It’s profit plummeted 52% to $4.4 billion.
Since Meta’s share price peaked in September 2021, the company has lost nearly two-thirds of its value… and that was prior to today’s market open.
The company warned that the fourth quarter would be more of the same, issuing a weaker-than-expected outlook.
Aside from this era of higher interest rates, lower advertising budgets and widespread economic uncertainty, you may be wondering what’s going on with Meta?
A prominent shareholder wrote in a letter this week, “Meta has drifted into the land of excess — to many people, too many ideas, too little urgency.” Plus, investors aren’t confident CEO Mark Zuckerberg can reinvent the company as a metaverse platform: the Reality Labs unit, which is responsible for developing the virtual reality and related augmented reality technology that underpins its plans for the metaverse, has lost $9.4 billion so far this year.
But Meta isn’t the only Big Tech company that’s struggling. Google parent Alphabet posted its slowest revenue growth since 2013 (outside of one early pandemic quarter), and YouTube ad sales actually fell in Q3. Microsoft also had its worst day since March 2020 after giving a disappointing Q4 forecast.
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