Just one year after boasting a market cap of approximately $1 trillion, Meta — the parent company of Facebook — has reportedly lost roughly two-thirds of its cap value.
According to CNBC, Meta's stock is currently trading at its lowest price since January 2019. It's also on the brink of closing out on a third consecutive quarter of double-digit-percentage losses.
Among Meta's reported problems over the past 12 months:
- Facebook users are jumping ship and advertisers are reducing their spending.
- Businesses are removing Facebook's social login button from its websites.
- The so-called "Metaverse," which reportedly drains billions of dollars from Facebook's bottom line every year, has yet to produce much near-term revenue.
Facebook co-founder Mark Zuckerberg recently told CNBC that within the next decade, the metaverse "will reach a billion people" and "host hundreds of billions of dollars of digital commerce.”
Meta's long-range plan with Metaverse: "The North Star" reaches the above benchmarks by the end of the decade and creates a "massive economy" around digital goods.
In the short term, Meta has had difficulty drumming up investor support for the metaverse project, CNBC reports.
"I'm not sure there's a core business that works anymore at Facebook," said Laura Martin of Needham, a financial analyst with a "sell" rating on Meta's stock.
It's worth noting: Facebook still has a dominant position in mobile advertising and one of the most profitable business models on the planet — despite the 36% drop in net income in the latest quarter from the prior year.
Even with that quarterly downturn, Meta reportedly generated $6.7 billion in profit and ended the period with more $40 billion in cash and marketable securities.
In North America (United States and Canada), Facebook's daily active users have slightly dropped over the last two years, now pulling in roughly 197 million users.
Outside of North America, Facebook's global user numbers have increased 10% during the same two-year period. However, early projections show only 3% growth through 2024, according to FactSet estimates.
Facebook's reported dalliance with artificial intelligence could also be a high-profile miss for Meta, according to Chris Curtis, an online marketing expert and consult.
"I'm old enough, and I was there when MySpace was a thing," Curtis told CNBC. "Social networks are switchable, right?"
When looking at Meta's user numbers, Curtis said the information suggests the company is "not in a good position."
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