“I appreciate the patience and believe that those who are patient will eventually be rewarded.” Mark Zuckerberg’s plea went unheeded by investors. Aware this Wednesday that the poor results of his group would be sanctioned on the Stock Exchange, the CEO of Meta (ex-Facebook) tried to reassure. The least we can say is that it didn’t work.
This Thursday, Meta had one of the worst sessions in its history. The share price collapsed by almost 25%. The group’s market capitalization is now “only” $263 billion, its lowest level since January 2016.
In a personal capacity, Mark Zuckerberg, owner of 13% of the shares of the social network that he founded in 2004, saw his assets melt by 11.2 billion dollars in a single day. He now weighs “only” 37.7 billion dollars.
And it doesn’t appear to be a simple stock market crash. Since the beginning of the year, the Meta kingpin has lost more than $87 billion, or 70% of the value of his assets. Since a peak of $141 billion reached in August 2021, Zuckerberg’s fortune has plummeted by more than $103 billion.
Zuckerberg outclassed by the head of TikTok
According to the Bloomberg Billionaires Index, the creator of Facebook is only the 28th richest person in the world. In a symbolic passing of the torch, the founder of ByteDance, the parent company of the Chinese social network TikTok, is now far ahead of him. His company is not listed on the stock market, but Zhang Yuming has an estimated wealth of 55,000 million dollars, 45% greater than that of the American.
Certainly, after the euphoria of the Covid period that had seen tech stocks break records, the awakening is brutal for the tech giants. From Alphabet (ex-Google) to Amazon to Meta, results have been disappointing for several months and stock prices are falling.
But for Meta, the situation seems more problematic. Stagnant in growth, faced with a contraction in marketing spending in this period of inflation and especially in competition with TikTok, Mark Zuckerberg’s group has opted to revolutionize the world of the web with its metaverse. Problem: This virtual world is currently a mirage and nothing guarantees its long-term success.
Above all, the group is spending a lot to develop its platform. The company revealed that it had lost more than $9 billion with its Reality Labs division – in charge of the metaverse – since the beginning of the year, including $4 billion in the third quarter alone. And this, after having already burned 10,000 million dollars in 2021. However, this is only the beginning, the company warned during the presentation of its quarterly results this Wednesday.
“VR is not aligned with reality”
Next year, the group plans to launch a new virtual reality headset to access its metaverse, which currently only averages 200,000 people a month online. A path judged by many analysts as heresy.
“Captain Zuckerberg continues to steer the Meta ship down an unknown path called the Metaverse and is determined to spend billions and billions of dollars in an effort to reinvent himself,” the analyst continues.
Meanwhile, the company is buying back billions of dollars in shares ($6.55 billion in the last quarter) to reassure investors and show that it believes in its project. Unfortunately, shareholders and investors are starting to lose patience.
Source: BFM TV
