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Meta announces lower Q4 earnings, stocks plunge

Meta, which owns Facebook, Instagram and WhatsApp, saw its shares plunge after hours on Wednesday after reporting a rare drop in fourth-quarter profit due to sharp increases in costs.

Shares of Meta fell 22.6% to $249.90 in after-hours trading.

The Menlo Park, California-based company said it earned $10.29 billion, or $3.67 per share, for the last three months of 2021. That’s down 8% from 11. $22 billion, or $3.88 per share, in the same period a year earlier. Revenue grew 20% to $33.67 billion.

Analysts, on average, expect earnings of $3.85 per share on revenue of $33.36 billion, according to a FactSet poll.

Meta Platforms Inc., formerly Facebook, adopted its new name last fall to signal CEO Mark Zuckerberg’s ambitions to become a “metaverse company”. Since then, the company has shifted resources and recruited engineers – including from competitors like Apple and Google – who can help realize his vision.

Metaverse is a kind of internet brought to life, or at least rendered in 3D. Zuckerberg described it as a “virtual environment” that you can enter instead of just viewing on a screen. Theoretically, the metaverse would be a place where people could meet, work, and play using virtual reality headsets, augmented reality glasses, smartphone apps, or other devices.

Zuckerberg is betting that the metaverse will be the next generation of the Internet because he thinks it will become an important part of the digital economy. He hopes people will start to see Meta as a “super-reverse company” in the coming years, rather than a social media company.

For now, however, the metaverse exists only as an amorphous idea inserted by a sci-fi writer. It’s not yet clear if that will be the next iteration of human-computer interaction the way Zuckerberg sees it, or just another playing field for tech and gamers.

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