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Meta's shares jumped.

 Shares in Meta jumped yes­ter­day after Mark Zuck­er­berg had laid out plans to fur­ther bring the social

Meta

media group’s costs under con­trol in what he deemed a «year of effi­ciency», as he repor­ted bet­ter than expec­ted sales, guid­ance for lower expenses and a new $40bn share buy­back. Meta, which owns Face­book, Ins­tagram and What­s­App, repor­ted fourth-quarter rev­en­ues of $32.2bn on Wed­nes­day, a 4 per cent drop from the year before, but at the top end of its guid­ance and slightly above ana­lysts’ estim­ates. Meta shares were up about 19 per cent shortly after Wall Street’s open­ing bell yes­ter­day. The fourth-quarter res­ults present a rosier pic­ture for Meta, which has been squeezed over the past year by the eco­nomic slow­down that promp­ted mar­keters to cut their spend­ing, along with heightened com­pet­i­tion from Tik­Tok and chal­lenges in tail­or­ing and meas­ur­ing ad cam­paigns fol­low­ing Apple’s pri­vacy changes.

Zuckerberg said Meta was now focus­ing on remov­ing some lay­ers of middle man­age­ment, cut­ting low-per­form­ing projects and deploy­ing arti­fi­cial intel­li­gence tools to help its engin­eers be more pro­duct­ive. Meta, which had expan­ded its head­count rap­idly since the start of the coronavirus pan­demic, has sought to bring down costs as Wall Street has increas­ingly ques­tioned its loss­mak­ing efforts to build an avatar-filled digital world known as the meta­verse. In Novem­ber, Meta announced its biggest head­count reduc­tions, dis­miss­ing 11,000 staffers.

Mark Zuck­er­berg has pushed hard to pro­mote his vis­ion of the meta­verse. But the chief exec­ut­ive of Meta Plat­forms on Wed­nes­day soun­ded more groun­ded. In a call with ana­lysts fol­low­ing fourth-quarter res­ults, Zuck­er­berg vowed 2023 would be the «Year of Effi­ciency». The com­pany behind Face­book, Ins­tagram and What­s­App now plan to spend between $30bn and $33bn on cap­ital expendit­ures in 2023.

He plans to con­trol oper­at­ing expenses, expec­ted to be $89bn to $95bn. Zuck­er­berg’s new­found pas­sion for rein­ing in costs is wel­comed. The 20 per cent jump in Meta’s shares in after­hours trad­ing sug­gests as much. Zuck­er­berg has not aban­doned his dreams of con­quer­ing the meta­verse.

Real­ity Labs, the divi­sion respons­ible for devel­op­ing Meta’s vir­tual and aug­men­ted real­ity projects, remains a money pit. The unit made an oper­at­ing loss of $13.7bn last year. Meta said that would widen in 2023, but it will «con­tinue to invest mean­ing­fully in this area». Meta’s share­hold­ers could do with some sav­ings.

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Comments

  1. Charlie3 February 2023 at 10:51

    The Metaverse is a complete failure right now with a lot of money poured into it and not much to show for it. They should drastically reduce funding for this or scrape it altogether

    ReplyDelete
    Replies
    1. Daniel3 February 2023 at 14:07

      Because Zuckerberg wanted to make Metaverse "The Thing" they had to let go of 11.000 people. He didn't make the smartest decisions in the past 1-2 years.

      Delete
    2. Clyde3 February 2023 at 15:01

      I don't see the Metaverse becoming a thing, not in it's current state, that's for sure. It looks awful as it is now. I don't understand how they even showed the world such an incomplete, half-baked thing.

      Delete
  2. Alex3 February 2023 at 17:27

    They should invest in AI and not in the metaverse. Not many people seem to be interested in this now and if there's not much interest then they won't make money from it.

    ReplyDelete

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