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NEW YORK (AP) — Stocks Facebook parent company Meta They are in the midst of their worst day on Thursday after the social media giant reported a rare drop in profits amid a sharp rise in spending as it invested heavily in its transformation into a virtual reality-based company.
Meta‘s shares fell more than 23% to $246.76 in early trading on Thursday, losing more than $200 million of the company’s total value, known as market cap. A drop this big would be the largest ever for a company in a single day. FacebookOn July 26, 2018, its market cap dropped by $120 billion.
The Menlo Park, California-based company said Wednesday its profits fell 8% to $10.29 billion in the final three months of 2021. Revenue rose 20% to $33.67 billion.
The decline may be partly due to this MetaIt spends on the Reality Labs segment, which includes virtual reality headsets and augmented reality technology. Meta It invested more than $10 billion in the segment in 2021.
Also, the recent privacy changes made by Apple make it difficult for companies like the one below. Meta following people for advertising purposes, which puts pressure on the company’s revenue. In a conference call with analysts on Wednesday, Meta‘s chief financial officer said the company faces a “headwind” of $0.0 billion from Apple’s changes in 2022. Analysts at MoffettNathanson called the forecast “surprising” in a note to customers.
Meta The company is also forecasting revenue well below analysts’ expectations for the current quarter, partly due to increased competition from TikTok.
Meta Platforms Inc. It got its new name last fall to highlight CEO Mark Zuckerberg’s focus on metadata. Since then, the company has been shifting its resources and hiring engineers, including competitors like Apple and Google, who can help realize its vision. It closed the year with 71,970 employees, mostly in technical roles, increasing its workforce by 23%.
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