Facebook's parent company Meta released its earnings report last night and the numbers were not in company's favour as the social media giant recorded a drop in the daily active users for the first time since its incorporation 17 years ago.
Apart from a drop in the daily users, Facebook missed the analyst forecast that expected a profit of $3.85 a share. The company earned $10.3 billion last quarter which translates into $3.67 a share, down from $3.88 a share last year. During the earning call, the company said, "We expect continued headwinds from both increased competition for people’s time and a shift of engagement within our apps towards video surfaces like Reels, which monetize at lower rates than Feed and Stories."
Furthermore, Chief Operating Officer Sheryl Sandberg and Chief Financial Officer David Wehner both blamed Apple's privacy change for the drop in the earnings with Wehner going as far as putting a price tag on it. According to the CFO, Apple's changes to iOS will cost Meta an estimated $10 billion in 2022.
On the heals of the news, Meta's stock fell by 23% in Wednesday's extended trading session. If the fall continues on Thursday, it will wipe away more than $200 billion in market cap. Meta's earning call had an effect on all the major social media platforms as Snap fell by 17% in after-hours trading while both Pinterest and Twitter were down by 10%.
While, we may see the fall continue, analysts say that this may be a good time to buy Meta's stock as the drop is purely based on the news, something that was seen recently after Microsoft announced Activision Blizzard acquisition.
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