A nightmare Thursday for Facebook, which pays dearly for the disappointing quarterly published last night by the social media giant. The Meta stock has come to sell 25% at the start to 97.36 dollars, the lowest since 2015. Since the beginning of the year, the stock has recorded a loss of over 70% with a market value collapsed by 677 billion this year.
In the $ 100 area, the stock marks a market cap of $ 265 billion that places the former Facebook out of the top 20 of the major Wall Street companies. Meta was the sixth largest US company by market capitalization at the start of the year.
Investors are frightened by rising costs to finance its version of virtual reality, coupled with a new drop in revenues.
Morgan Stanley, Cowen and KeyBanc Capital Markets cut their ratings on the stock after the company provided a disappointing quarterly outlook on revenues. “Meta remains too aggressive with its investments in long-term initiatives despite a sharp slowdown in expected revenue growth,” said Mandeep Singh, an analyst at Bloomberg Intelligence.
The giant led by Mark Zuckerberg suffered the second consecutive quarter of decline in turnover, expecting yet another decline in sales for the fourth quarter of the year. Meta Platforms earnings per share (EPS) came in at $ 1.64, up from $ 1.89 expected, according to analysts interviewed by Refinitiv. Revenue was $ 27.71 billion, slightly better than the consensus expected $ 27.38 billion, down 4%.
Costs rose 19% yoy to $ 22.1 billion, while operating income sank 46% yoy to $ 5.66 billion. The number of daily active users of Meta -Daily Active Users (DAUs) – was 1.98 billion, as expected, while the number of monthly active users -Monthly Active Users (MAUs) – was equal to 2.96 billion, higher than the forecast 2.94 billion. Meta announced that it expects revenue between $ 30 and $ 32.5 billion, lower than the $ 32.2 billion expected by the consensus.