Topline
Shares of Meta spiked more than 18% in after-hours trading after the company beat its fourth-quarter revenue estimate, delivering a jolt of good news after a dismal year for the company in 2022.
Then-Facebook CEO Mark Zuckerberg leaves after the “Tech for Good” Summit at the Elysee Palace in … [+]
Key Facts
Meta reported revenue of $32.2 billion in the fourth quarter, 4.5% less than the $33.7 billion reported in the same period last year but above the roughly $31.5 billion analysts were forecasting.
Meta stock futures spiked 18% immediately after the announcement; shares have plunged 53% over the past year, far more than the tech-heavy Nasdaq’s 19% decline.
The company reported 2 billion daily active users—an increase of 4% year-over-year and more than the 1.99 billion expected.
Key Background
Meta has now reported declining revenue in three consecutive quarters, as the company grapples with drops in online advertising spending and increased competition from TikTok—issues that have taken tolls on other U.S. social media companies. Meta’s stock plummeted last year as CEO Mark Zuckerberg prioritized the company’s focus on the metaverse, which he has repeatedly billed as a revolutionary, immersive online experience. But his vision has largely failed to impress investors, as the company’s metaverse-centered Reality Labs unit lost more than $9 billion in the first three quarters of 2022 and Zuckerberg’s demonstrations of the metaverse were widely mocked. Meta cut around 11,000 jobs—13% of its workforce—in November and extended a hiring freeze through the start of 2023 as cost-cutting measures.
Tangent
Meta announced last week it was reinstating former President Donald Trump’s Facebook and Instagram accounts, which were banned for two years following the January 6, 2021 attack on the Capitol. Spokesman Nick Clegg said in a statement the company doesn’t believe Trump’s presence poses the same “serious risk to public safety” that it did shortly after the storming of the Capitol.
Forbes Valuation
We estimate Zuckerberg is worth $55.2 billion. The 38-year-old started Facebook at Harvard in 2004 and now owns about 13% of Meta’s stock.
Further Reading
Snap Losses Top $115 Billion As Company Struggles To Live Up To ‘Show Me’ Moment (Forbes)
Does Mark Zuckerberg Not Understand How Bad His Metaverse Looks? (Forbes)
Meta Confirms Layoffs—11,000 Jobs Cut At Facebook’s Parent Company (Forbes)
Source: https://www.forbes.com/sites/nicholasreimann/2023/02/01/meta-stock-soars-after-beating-revenue-estimate/