Decline in net income, decrease in the number of users, unambitious forecasts in the sense of investors, here is the cocktail of the fall in the Facebook share price. An action that goes from 323 to 249 dollars after the closing of the New York stock exchange.
Disappointing Results And Forecasts
If the group’s turnover for the fourth quarter of 2021 was more or less in line with forecasts (33.7 billion dollars), the net profit could make your teeth cringe. With 10.3 billion dollars, a figure down 8% compared to Q4 2020. In addition to the results, the forecasts did not reassure investors. Thus, for the current quarter, Meta Platforms is now counting on a turnover of between 27 and 29 billion dollars, while analysts predicted that it would exceed 30 billion.
But the market has also sanctioned the drop in the number of users. The first since the creation of the social network 18 years ago. Over the last 3 months of 2021, the American company deplores a drop of around 1 million user accounts. A particularly visible decline in two areas: Latin America and also Africa, these two geographical areas concentrated a drop of around 3 million users over the quarter.
Although the number of users had not increased in Europe or North America for several quarters, this stagnation had so far been offset by increases in other geographical areas. This was not the case for the last quarter of 2021. A drop which nevertheless remains to be put into perspective, the group still being able to boast of the astronomical figure of 1.929 billion daily active accounts. It is therefore the concordance of all of these elements that saw the Facebook share price fall after market close: – 23%.
The Metaverse Is Very Expensive!
Last October, when the company name change was announced, Mark Zuckerberg announced investments in the metaverse sector to the tune of $10 billion. At the heart of this strategic refocusing, is the entity Facebook Reality Labs. A sub-division of the group posted losses of 3 billion dollars in the fourth quarter of 2021 and more than 10 billion over the whole of 2021. But for now, it is more about investment only deadweight losses.
Many observers note that monetizing the metaverse could take several years for the Meta group. A real risk when you know that it is the main source of income for the group. But Meta Platforms seems to have taken a long-term bet. A bet that could pay off if the metaverse were to develop by current speculation and expectations.
Meta Platforms Stock: A Buy Opportunity?
A sharp decline in the price of a security can often provide an attractive buying opportunity. Anyway, the upcoming session may be particularly volatile for the title Meta.
If the trend is confirmed when the stock markets reopen this Thursday morning in the United States (3:30 p.m. French time), the Meta group could then suffer a capitalization loss of around $175 billion. The price to pay according to Mark Zuckerberg is to offer a long-term vision to investors. The CEO of the company could lose nearly 20 billion dollars and drop out of the top 10 richest people in the world.