Meta Platforms, which seeks to morph into a multiverse medium from a social network, is doing one thing very well: dragging down the market. The Facebook parent lost almost 25% in Thursday trading, after reporting after hours the previous day. The Nasdaq Composite slid 1.6% and the S&P 500 was off 0.6% on Thursday.
To appreciate what awful shape Meta stock is in, compare it with the fate this year of other members of the once-vaunted FAANG cohort. Their losses are nasty, but nothing like that of Meta, which has dropped 71% in 2022.
The 2022 FANG declines: Alphabet (Google), down 36%; Amazon, 32%; Apple, 17%; and Netflix, 50%. While Meta shed a quarter of its value Thursday, the others’ slides were less drastic, ranging from Netflix’s 0.6% to Amazon’s 4%.
For the third quarter, Meta reported an earnings shrinkage of 52%, as revenue fell 4%. Expenses soared 19%. Management’s projections for the fourth quarter were similarly dour. Amid widespread doubts within the corporation’s ranks about CEO Mark Zuckerberg’s ambitious plans to transition the business into a gateway to the metaverse, he is talking about a need for layoffs.
At least users of Facebook and other apps such as WhatsApp went up in the third quarter. At the same time, however, losses for the unit dedicated to virtual reality lost $3.7 billion for the quarter, versus $2.6 billion in red ink a year earlier.