Meta shares slump 24% after quarterly earnings release

Meta lost almost 25% of its market value in after-hours trading following the publication of the fourth-quarter 2021 earnings report.

According to CNBC, investors were stunned by earnings per share of $3.67 and the revenue guidance for January–March of $27 billion–$29 billion, below market expectations of $3.84 and $30 billion respectively.

Active-user metrics were also disappointing — both daily active users (which hit an all-time low) and monthly active users, with the exception of revenue per user.

The company attributed the deterioration in operating metrics to changes in Apple\’s iOS privacy rules and macroeconomic issues. In particular, rising inflation and supply-chain challenges affected advertisers’ budgets. The shift of users toward less monetizable products, including the TikTok competitor Reels, also weighed in.

The metaverse-related Facebook Reality Labs unit posted a loss of $3.3 billion on revenue of $877 million.

The slowdown in business growth occurred amid a major rebranding.

The company aims to move to the ‘next stage in the evolution of social connections’ in the form of the metaverse, as reflected in the renaming of the company from Facebook to Meta.

At the analyst conference, CEO Mark Zuckerberg reminded about creating digital avatars for virtual and augmented reality, neural interfaces for control, and an environment for their existence.

Earlier, Meta opened access to the social network in virtual reality Horizon Worlds for adult residents of the United States and Canada.

In January 2022, Meta, which stood at the origin of creating the Diem project (formerly Libra) within the Diem Association, announced its sale to Silvergate Capital Corporation. The deal was reportedly worth $200 million.

Former Twitter boss and Block CEO Jack Dorsey criticized Meta for “wasted efforts” on Diem instead of “making Bitcoin more accessible to more people around the world”.

Previously, the Oculus CTO doubted Meta’s friendliness toward cryptocurrencies.

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