Meta was the sixth largest US company by market capitalization at the beginning of the year, flirting with a market value of $1 billion. Fast-forward 10 months and the stock will be worth about $258 billion, ranking 26th. Its market value is now less than the likes of Chevron Corp., Eli Lilly & Co. and Procter & Gamble Co.
The forecast reduced Meta’s market value by some $67 billion on electronic platforms after the regular market closed, adding to the more than half a trillion dollars of value it has already lost this year.
Once a Wall Street favorite, Meta is gradually falling out of favor with brokerage houses. At least three investment banks — Morgan Stanley, Cowen and KeyBanc Capital Markets — downgraded the stock after the company gave a disappointing quarterly earnings outlook.
This drop represents its biggest one-day loss since February 2, when the company issued another poor forecast.
The disappointing outlook comes as Meta grapples with slowing global economic growth, competition from TikTok, privacy changes from Apple, concerns about massive spending in the metaverse, and the ever-present threat of regulation.
Executives announced plans to merge offices and said Meta would keep its headcount unchanged until the end of 2023.
Revenue fell 4% in the third quarter ended September 30. This deepened the revenue decline that began the previous quarter, when the company first posted a 0.9% drop in revenue, although it was less pronounced than the 5.6% decline Wall Street expected, according to IBES data. from Refinitiv.
More troubling was the company’s estimate that fourth-quarter revenue would be in the range of $30 billion to $32.5 billion, well below analyst estimates of $32.2 billion, according to analysts. Refinitiv data.
Meta also forecast its total spending for the full year of 2023 to be $96 billion to $101 billion, significantly higher than a revised estimate for total 2022 spending of $85 to $87 billion. millions.
This includes an estimated $2.9 billion in expenses over the course of 2022 and 2023 for office downsizing. He also estimated that the operating losses associated with the Reality Labs unit, responsible for its investments in the metaverse, would increase in 2023 and it promised to moderate investments after that date.
Total costs for the third quarter beat estimates at $22.1 billion, up from $18.6 billion a year earlier.
Source: Ambito
David William is a talented author who has made a name for himself in the world of writing. He is a professional author who writes on a wide range of topics, from general interest to opinion news. David is currently working as a writer at 24 hours worlds where he brings his unique perspective and in-depth research to his articles, making them both informative and engaging.
