Today marks one year since Facebook officially changed its name to Meta and began its journey down a new path towards the realization of a replete, immersive metaverse. In a bid to corner the market and get ahead of the competition, Mark Zuckerberg opted to go all-in and invest aggressively in both artificial intelligence (AI) and the Metaverse, but unfortunately, things haven’t gone quite according to plan. Meta stock has plunged following its recent financial report, and many critics have panned the social media giant’s seemingly lackluster and “lifeless” metaverse, Horizon Worlds , which is also allegedly losing users. Not only that, but Meta is no longer in the top 20 most-valuable companies in the US. The real question now is, “Is this the end of Zuckerberg’s lofty ambitions?” Let’s dig in!
Too Much Too Soon?
Meta’s overall value has fallen by $700 billion USD in what Wall Street is calling “a train wreck.” All over the news right now, it looks like it’s doomsday for Meta, and seeing that the decline in their stock price is the highest in corporate history to date, it’s little wonder why everyone is hopping on the bandwagon and declaring that the company is hurtling towards its demise. However, as the great Winston Churchill once remarked, “If you’re going through hell, keep going.” In times like these, it’s important to remember that 2022 has been the worst for markets in at least five decades. In other words, 2022 has been awful for many businesses, and with Meta’s dramatic shift in a new direction, they haven’t escaped the contagion either.
If you’re looking in the short term, yes, the Metaverse is a mess. In fact, it doesn’t even exist yet. Everything we’re seeing is still a prototype of what will finally come to be at best, and an unmitigated disaster at worst. In any company where a change in strategy occurs, it stands to reason that investor confidence may take a hit if they don’t see certain milestones being hit within a certain period of time. And with all the hate Meta has received from critics and YouTube influencers, there was just no way they were going to finish up their first year without taking some major hits.
From an open letter by Brad Gerstner , the CEO of Altimeter Capital , it’s apparent that investors don’t want Meta to stop developing the Metaverse, but it is clear that they would like to reduce spending for the time being and cut back on the number of people working at Meta.
Check out our article Shareholders Demand Meta Cuts Back on Metaverse Spending? by clicking here.
Is Meta Truly Done For?
Things aren’t looking good for Meta right now, but it’s entirely likely that the stock is currently oversold (not financial advice). I’m not sure if the price will go any lower or if it will steadily increase to a slightly higher level, but right now, Meta stock is down. But is Meta done for? No ways. We’re not talking about some run-of-the-mill garage business here. Despite not being one of the top 20 businesses in the US anymore (for now), Meta is still a huge company with a ton of assets, IP and revenue streams. Financial markets thrive on speculation and sentiment, and when there’s bad news, many people sell out so they can buy other stocks or buy back the stock they sold at a lower price. It’s just the nature of the game.
While it’s uncertain exactly how long it will take Meta to recover from this terrible blow, I don’t think there’s any reason to panic or assume that they’re done for. I obviously can’t foresee the future, but Zuckerberg has chosen this past for a very specific reason and purpose. He’s faced a ton of adversity before and managed to come out on top just about every time. He may be unscrupulous in many ways and ethically questionable, but Mark Zuckerberg remains a formidable force to be reckoned with. Meta may still be years away from their grand vision, but they won’t be giving up anytime soon.
And this may not be the last time Meta faces adversity. As sentiments change and there are waves of euphoria, so too are there waves of fear, uncertainty and doubt. The development of the Metaverse may be the roller coaster ride to end all roller coaster rides, but that’s OK. No matter what, we’ll be here throughout the journey.
So what do you think about Meta’s financial woes? Is this really the end of the social media giant? Or do they still have a chance to succeed in their mission? Let us know your thoughts!