Meta continues its slide following Facebook name change as share price nears pandemic low
Is the metaverse really worth it?By Rob Thubron 17 comments
In context: It's been almost one year since Facebook changed its corporate name to Meta, and life hasn't been smooth sailing for the company in that time. Just look at Meta's share price, which has fallen almost as low as in March 2020, when tech stock prices crashed due to the pandemic.
Meta's share price is currently $146.29 following five straight days of declines. CNBC notes that it's only 28 cents higher than the closing price on March 16, 2020, the lowest price it hit during the pandemic stock crash.
Arguably Meta/Facebook's biggest crisis in its history (there have been a lot of them) was the Cambridge Analytica scandal and the resulting fallout—the social media firm last month settled one of the lawsuits brought against it over the incident. The public outrage at the time crashed its shares to a low of $146.01 in January 2019. If the current trend isn't reversed soon, the price is in danger of falling below that level.
Meta's share price over the last year won't bring a smile to Zuck's face
Meta CEO Mark Zuckerberg's conviction that the future of the internet lies in a shared augmented/virtual reality space prompted the company to change its corporate name to Meta last October.
The all-new Meta parent company has had a difficult time since its inception. February brought news that it was down $500 billion since the name change, and the company's first-ever revenue decline since Facebook went public was recorded in July. In August, there were reports of teen users—a demographic Facebook has long been chasing despite their indifference toward the 'old person's' social media platform—abandoning the service in droves for the likes of YouTube.
But what about the metaverse division, Reality Labs? It lost $10.2 billion throughout 2021, $2.96 billion in the first quarter of 2022, and $2.8 billion in the second quarter. It's also making cutbacks by axing projects, including the dual-camera smartwatch. Adding to the problems, Meta is said to be one of many tech giants cutting staff/reducing hiring this year as it deals with the economic downturn.
Zuckerberg hasn't lost faith in the Metaverse. The CEO thinks it could make billions or even trillions over time and that the company is laying the groundwork for what he expects to "be a very exciting 2030." Zuck no doubt hopes Meta's share price will recover before then.