When Meta Platforms (FB) lost around one-quarter of its value, it made a record. No stock ever fell by that magnitude. After the company revealed its metaverse platform spending in the $95 billion range, what should investors do next?
Facebook reported strong revenue growth of 20% Y/Y to $33.67 billion. Cost growth increased by 38%, outpacing revenue. More worrisome is the daily active user growth dropping. Facebook masked the loser usage by reporting 2.8 billion people using at least one of its family of apps daily.
In Q1, Meta Platforms will report revenue of up to $29 billion. Ad impressions and price growth are falling. Facebook and Instagram failed to adapt to Apple’s IDFA. This is a feature that asks users for permission to track. Over 60% of the users do not give the needed permission. This hurts Facebook’s ability to follow users. It decreases advertising effectiveness.
Risks Mounting
Facebook’s censorship against groups hurts free speech. Twitter (TWTR) did the same in the last year. TWTR’s downtrend is not ending any time soon as a result. Investors should consider avoiding companies that limit free speech on their platforms. It hurts user traffic in the end.
