Last autumn, Facebook announced that it had decided to take a new direction and focus on the virtual world (Metaverse), to which it also adapted its new name, Meta Platforms. Metaverse is becoming more and more used in our world.
There are many examples of the use of 3D virtual worlds on the global market. In February, Decentraland hosted the first wedding that took place in a blockchain-based Metaverse environment, as reported by Cointelegraph. In doing so, Decentraland made a name for itself through the trading of land in virtual worlds. The popular game Roblox and various other projects are also based on virtual reality. This is also why Meta Platforms sees its future in this burgeoning world of virtual reality, which it describes as the evolution of social connection in society. This is because 3D places in the Metaverse not only allow us to socialise without the need to physically relocate, but also to learn, collaborate and play in ways that are beyond the possibilities of our imaginations.
Smart glasses
In this context, the company reports on its website that it is developing wearable technologies such as smart glasses, which are intended to be one of the gateways to the Metaverse environment and allow us to interact with the world around us. In this regard, Meta Platforms has joined forces with EssilorLuxottica to create the first smart glasses called Ray Ban Stories. They were introduced late last year and allow you to record audio and video through a single touch. They are expected to sell for €329 and will be available online and in selected retail stores in Spain, Austria and Belgium in 20 designs. At the same time, they should be just the first step on this journey towards implementing virtual environments into everyday life.
The year 2022 has not started in the happiest way
This year does not seem to be one of the most ideal ones for the company. First, the stock plunged on the news that the number of users of the platform had dropped for the first time in its 18-year history. Later, the company reported that it may have to shut down its key social networking services Facebook and Instagram in Europe due to GDPR. Another of the negative reports was the information that it was cancelling its cryptocurrency project Diem, which was supposed to be an alternative to traditional fiat currencies for an estimated number of up to 2 billion people. And with that, the series of bad news certainly didn't end. The company also reported a sharp rise in the cost of developing the virtual technology of the future and a forecast of poor revenue prospects from it. Meta also acknowledged slowing revenue growth in general. It cited increasing competition as the reason.
Zuckerberg fell in the ranking of the rich
The aforementioned information triggered a negative sentiment among investors, which turned into a significant drop in the company's stock market value in February as a result of the concerns. The company's founder, Mark Zuckerberg, also lost tens of billions of euros, dropping out of the world's top ten richest people for the first time in seven years.
The fall in results
In its latest financial report for the first quarter of 2022, the company reported revenue of $27.91 billion, a year-on-year growth of 6.64 per cent. Net profit was $7.47 billion, but that was down 21.40 percent year-over-year. However, looking at the annual reports for the past five years, we can see that revenue and net income have been increasing each year.
Meta Platforms Inc's performance over the last 5 years. (Source: Google Finance)
The development of share value
At the time of writing this report, the stock was valued at $195.13, an increase of more than 410 percent since the stock went public in 2012. On the other hand, due to the above-mentioned factors, it has fallen by more than 42 percent during this year. It peaked in September 2021, when its price reached $378 per share. Interesting appreciation can also be seen by looking at the development over a five-year period, where we see that the stock has achieved a growth of 27 percent.* If the company manages to resolve its current problems, it could continue to represent an interesting diversification of the investment portfolio for investors in the long term.
The evolution of Meta Platforms Inc's stock market value over the last 5 years.
(Source: Google Finance)
* Past performance is no guarantee of future results.
[1] Forward-looking statements are based on assumptions and current expectations, which may be inaccurate, or on the current economic environment, which may change. Such statements are not guarantees of future performance. They involve risks and other uncertainties that are difficult to predict. Results may differ materially from those expressed or implied by any forward-looking statements.
