They don’t ring a bell at the top of the market, or so the saying goes. But for the last 12 months at technology giant Meta, they’ve barely stopped.
But the big surprise came on the cost side of the business, where founder and chief executive Mark Zuckerberg outlined plans to spend $US96 billion to $US101 billion in 2023, well above analyst expectations for spending of $US94 billion. Capital expenditure is set to come in between $US34 billion and $US39 billion, above the market’s forecast for $US29 billion.Meta has an old-school problem. Revenue is under pressure, mainly from a combination of competition and macroeconomic headwinds.
Wrapping your head around what the metaverse is and could be is not easy – this column’s best guess is some sort of turbocharged video game world, where a user’s avatar exists in a sort of parallel universe. But understating why Zuckerberg would put so many eggs in this basket with his core business under obvious pressure is arguably harder.
Meta’s core business is clearly very profitable, but the scale of Zuckerberg’s metaverse threatens to overshadow it. It’s not just the dollars lost, but the damage to Meta’s standing in the tech community as the best and brightest in the tech sector grow less believing in Zuckerberg’s leadership and the depth of Meta’s pockets.
Or Wall St should never have put the valuation they did on a company investors don't control. This is one of the risks. Sometimes it works like NewsCorp, sometimes it doesn't like Snap. Time will tell for Facebook.
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