After the social network company (Meta Stock) reported weaker-than-expected second-quarter earnings and warned that its metaverse segment would post bigger net losses over the coming year, Meta Platforms (NASDAQ:META) shares appear to be headed for their largest one-day plunge in over nine months.
As the social media corporation continues to move away from its Facebook roots, Meta stated it would “meaningfully” ramp up investments in Reality Labs, the subsidiary that will house the business’s plans for the metaverse and has taken on more than $9.4 billion in losses thus far this year.
The decision to double down on the costly venture more than offset some modest positives from Meta’s underlying social media business and looks to extend the stock’s near 70% year-to-date decline at the start of trading. This will add at least another $4 billion to next year’s capital spending plans, which are now estimated to range between $30 billion and $34 billion.
Meta Stock / Share Price
Profits for the third quarter dropped 49% from the prior year to $1.64 per share, falling 15 cents short of Street expectations, while revenues dropped 4% to $27.71 billion. Despite an 18% decline in the average price per ad, Meta reported an increase in ad impressions of 17%.
With respect to the last three months of the year, Meta predicted revenues between $30.0 billion and $32.5 billion, which is less than the $32.3 billion Street prediction.
2.96 million monthly active users throughout Meta’s “Family of Apps” were recorded, an increase of 2% from last year, while the number of daily active users reached 1.98 billion, a marginally higher number than anticipated.
Early on Thursday, Meta shares (NASDAQ:META) were down 22.4%, changing hands for $100.58 per. The action would reduce the market value of the group by about $80 billion and represent the largest single-day loss since February 2.
Featured Image- Unsplash @ Dima Solomin