Zuckerberg “cry”! “Metaverse” huge loss Meta plunged 26% market value wiped out $ 200 billion | Blog post

Since Meta announced the name changefirst financial report, The “Metaverse” department lost more than $10 billion in the past year, triggering a large-scale market sell-off, setting the largest single-day loss in market value in the history of U.S. companies: Meta’s stock price plummeted 26% on Thursday (February 4), and the market value evaporated by regarding 251.3 billion Dollar. It was also unable to rebound on Friday, dipping a further 0.3%.

Meta shares plummeted. AP picture

The slump in Meta’s stock price triggered a collective collapse of social media companies’ stock prices on Thursday. Snap fell nearly 24%, and Twitter fell more than half; it triggered a general decline in technology stocks. Microsoft retreated nearly 4%, Apple fell nearly 2%, and Amazon fell 7.8%.

According to people familiar with the matter, the disappointing earnings report made Zuckerberg “cry”. caused by scratches.

Meta released its first earnings report since launching its “Metaverse” strategy.

This is Meta’s first financial report since launching its “Metaverse” strategy. According to the financial report, Meta’s revenue in the fourth quarter of last year was 33.7 billion US dollars, of which sales were 32.6 billion US dollars; net income was 10.3 billion US dollars, and earnings per share were 3.67 US dollars; monthly active users were 2.9 billion, which was lower than expected.

After the name change, Meta’s financial report for the first time is divided into two parts: Family of Applications (FoA) and Facebook Reality Labs (FRL).

FoA mainly includes Facebook, Instagram, Messenger, WhatsApp, etc. Meta’s main source of income comes from advertisements placed on these platforms.

As for building the “metaverse,” the cost is quite high, with development arm Reality Labs reporting huge and growing losses, burning $10.2 billion over the past year on less than $2.3 billion in revenue.

Andrew Bosworth, head of Reality Labs.

Reality Labs was established in 2018, and the person in charge has always been Andrew Bosworth, who graduated from Harvard University and was just promoted to Meta CTO this year. Reality Labs mainly researches VR/AR technology and products, and is an important department responsible for realizing Zuckerberg’s metaverse vision. Its hardware product Meta Quest (formerly Oculus Quest) is one of the best-selling VR devices on the market.

Reality Labs has been losing money year following year.

In fact, Reality Labs has been losing money year following year. In 2019 and 2020, Reality Labs’ revenue was $500 million and $1.14 billion, respectively, and its losses were $4.5 billion and $6.6 billion. However, losses this year have increased significantly, and the net loss is regarding 150% of 2020.

Where is this increased loss being used?

As we all know, Zuckerberg will be “all in the metaverse” in 2021. Of the more than $10 billion burned, $4.2 billion was spent on staff costs, R&D and sales, the CFO said.

In addition, Zuckerberg also said that the rapid rise of competitors such as TikTok has brought short-term pressure on Meta’s business, and Apple’s new iOS privacy policy, which allows iPhone users to turn off the app’s permission to track user activities, has a negative impact on Meta. revenue has had a huge impact.

However, in the face of huge losses, Zuckerberg has no plans to relax, and Meta has already expected that Reality Labs’ losses in 2022 will “significantly increase.”

Zuckerberg said frankly that in the next 1-3 years, it is mainly the stage where the Metaverse lays the foundation, and it is impossible for these investments to be profitable in the short term. He hopes to open up a new social model through the Metaverse as a means to restore user growth.

But at least judging from the market reaction this time, it seems that investors may not wait that long, and Zuckerberg still has a long way to go if he wants to rely on the Metaverse to carry the banner.