Site icon Wonderful Engineering

Mark Zuckerberg Says Meta Is Heading In A ‘Good Direction’ As Stock Crashes

Mark Zuckerberg Says Meta Is Heading In A 'Good Direction' As Stock Crashes

Despite a third-quarter financial performance worse than anticipated, Meta CEO Mark Zuckerberg stated on Wednesday that his company is still heading “in a good direction,” Insider reported.

“We’ve been through a couple of these cycles before already, and I’m pretty confident this is going in a good direction,” said Zuckerberg.

“And while we continue to navigate some challenging dynamics – a volatile macroeconomy, increasing competition, ads signal loss, and growing costs from our long-term investments – I have to say that our product trends look better from what I see than some of the commentaries I’ve seen suggests,” he added.

Meta’s third-quarter net income fell 52 percent year on year to $4.4 billion, as R&D spending increased 45 percent, owing primarily to the company’s investments in the metaverse. In after-hours trading Wednesday, Meta stock plunged over 20% to $104.30, its lowest level since 2016.

Investors are afraid that the size of Meta’s metaverse investments may detract from the company’s core social-media operations, such as Facebook and Instagram.

On Wednesday’s earnings call, analysts questioned Zuckerberg on the company’s metaverse goals, engagement levels for Instagram Reels, and falling digital advertising revenue.

Meta’s work on the metaverse, according to Zuckerberg, will be “historically important.” He admitted that sales were “still behind where I think we should be” but projected that the company would return to “healthier” revenue growth next year. Meta reported its first-ever year-on-year sales loss of 0.9 percent in the second quarter of 2022.

In the three months to September 30, net income from Meta’s social-media segment fell by more than a quarter to $9.3 billion. So, it seems like Meta is in a terrible condition at present, partly because Zuckerberg decided to bet big on the metaverse. Sadly, that hasn’t stirred the public’s interest in the subject.

The company’s net profitability has drastically decreased year over year due to the enormous additional costs associated with implementing Zuckerberg’s concept for the metaverse.

Investors are growing frustrated as Meta has almost nothing to show for its virtual world promise.

“Look, I get that a lot of people might disagree with this investment, but from what I can tell, I think this is going to be a very important thing,” Zuckerberg told investors. “People will look back a decade from now and talk about the importance of the work being done here.”

However, it is unclear if that project will get a real shot within that time window.