Meta Platforms (NASDAQ:META)
On Monday, shares of Meta Platforms (NASDAQ:META) fell, going as low as 4.2%. The Meta stock recovered some earlier losses at 2:44 p.m. ET, trading down 0.2%.
When investors in the social media giant were processing a downgrade from an analyst and the comments of an activist investor, the two pieces of news competed for their attention.
What’s the Reason?
The first event was sparked when BofA analyst Justin Post lowered Meta stock from buy to neutral (hold) and subsequently reduced his price objective for the business from $196 to $150. The analyst predicted that marketing departments would reduce their spending for the balance of this year and the following, which would hurt Meta’s advertising income.
Additionally, the corporation is still dealing with the fallout from Apple’s policy shift from last year, which allowed customers to disable monitoring. As a result of Apple’s privacy reforms, Meta has found it difficult to target users efficiently. On top of that, Meta created Reels to rival TikTok, but it hasn’t been that successful thus yet.
Finally, Post thinks investors will punish Meta stock until the business demonstrates it isn’t simply throwing money away on the metaverse.
This morning’s rally was aided by an open letter from Altimeter Capital Management chair and CEO Brad Gerstner. It was suggested in the letter that Meta downsize its workforce by 20% and limit its annual expenditures on the metaverse to no more than $5 billion. “An anticipated $100 billion or more investment in an uncertain future is supersized and alarming even by Silicon Valley standards,” stated Gerstner.
What’s Next?
Meta stock investors have been more concerned about the company’s slowing sales growth and rising expenses. Some investors have been on the sidelines since Meta announced a year-over-year revenue loss in the second quarter and a sequential fall in monthly active users (MAUs). As a consequence of the weak economy, Meta anticipates a continuation of its revenue decline in Q3.
There’s no denying that Meta faces obstacles on her path. However, Meta will weather the economic storm due to its 3.65 billion monthly users and billions in free cash flow. We continue to recommend buying the Meta stock for the long term.
Meta Description
Investors had a lot to process after an activist investor’s downgrading and a move.
Featured Image – Megapixl © Inkdropcreative1
Author Shariq Khan 
