Meta is no longer one of the top 20 companies in the world

Meta is no longer one of the top 20 companies in the world
FILE PHOTO: A logo of Meta Platforms Inc. is seen at its booth, at the Viva Technology conference dedicated to innovation and startups, at Porte de Versailles exhibition center in Paris, France June 17, 2022. REUTERS/Benoit Tessier

Meta’s latest big project is Reality Labs (RL), a metaverse initiative that hasn’t quite taken off yet. RL used to be the independent company Oculus until Facebook (now Meta) bought it, integrating its software and hardware. Right now, they’re doing a lot of (very expensive) development in cutting-edge tech. They’re researching “co-adaptive learning” using high-tech wristbands, working on “super real 3D audio” and developing photo-realistic VR avatars.

But Meta actually lost US$676 billion this year. It’s no longer one of the top 20 largest companies in the world. This shift is in part caused by Reality Labs, which is reporting its third straight quarterly loss of US$9.44 billion total in 2022 (so far). Last year, it saw US$10 billion in total losses. Meta’s stock is now down as much as 25%. But this isn’t all RL’s fault. Meta also had disappointing revenue this past quarter, bringing in only US$1.64 earnings per share after estimating US$1.88.

Key comments:

“Meta remains too aggressive with its investments in long-term initiatives despite a sharp deceleration in expected revenue growth. The company’s opex and capex view for 2023 is surprising, given the lack of traction so far with its metaverse efforts,” said Bloomberg Intelligence analyst Mandeep Singh.

“It’s often going to take a few versions of each product before they become mainstream. I think that our work here is going to be of historical importance and create the foundation for an entirely new way that we will interact with each other and blend technology into our lives as well as the foundation for the long term of our business,” Meta CEO Mark Zuckerberg said of Reality Labs on Meta’s earnings call.

“Meta needs to re-build confidence with investors, employees and the tech community in order to attract, inspire, and retain the best people in the world,” Meta investor Brad Gerstner wrote in an open letter to the company. “In short, Meta needs to get fit and focused.”