The company also missed its earnings targets last year partly due to Zuckerberg's investments in the metaverse, a lofty project that burned through $13.72 billion and angered many of Meta's investors.īut Zuckerberg shifted his tone in Meta's latest earnings call, Munster noted. That comes after a dismal year for the Facebook parent, which saw shares plunge 64% in 2022 amid rising inflation and higher interest rates. Shares rose to $182.35 at 10:00 am ET, up 19% from Wednesday's close. Though Munster previously predicted an " ugly" fourth quarter for Meta, the company's stock soared on Thursday morning after it announced it would be buying back $40 billion in shares and start slashing costs. Meta's stock rose in after-hours trading by nearly 20%, to its highest level in seven months.Meta stock could pop as much as 30% as Mark Zuckerberg appears to finally be waking up to investors' tepid response to his metaverse ambitions and focusing the company on other initiatives, Deepwater Asset Management partner Gene Munster said Thursday. Instead, praise went to the growth of business messaging and AI investments that have started to improve Meta's advertising business and user-targeting capabilities. Such boasting about the metaverse and the Reality Labs division was nowhere to be found during Wednesday's discussion of the year ahead. "I think people are going to look back decades from now and talk about the importance of the work that was done here," Zuckerberg said last fall. David Wehner, the then-CFO who is now the chief strategy officer, said spending on the Reality Labs division would increase "significantly" in 2023. Zuckerberg has said several times over the past year that spending on the metaverse was about fortifying the future of Meta, formerly known as Facebook, as well as the "future of the internet," and that building the metaverse would prove historic.Īnd in October, Zuckerberg struck a defiant tone on spending - particularly on the metaverse - while discussing third-quarter earnings. The company is cutting at least $1 billion out of its planned capital expenses for the year, too, saying $30 to $33 billion would be spent, down from a prior range of $34 to $37 billion. Susan Li, Meta's new chief financial officer, said on the call that losses from Reality Labs will "continue" in 2023 because it is a "long-duration investment." Still, Reality Labs would be subject to the same push for efficiency as other parts of the company, Zuckerberg said. "That was honestly a little surprising to me - that as we started digging into this, the company felt better to me." "By reducing layers of management, it's made information flow through the company better, and it will help us make better products and attract and retain better people," Zuckerberg said on the call. He added that last year's layoffs and an ongoing reorganization "surprised" him as they not only cut costs, but also improved communication and progress on future products. Meta will focus on " efficiency" going forward, Zuckerberg said on a call with Wall Street analysts discussing its fourth-quarter financial results. The Reality Labs division, tasked with building the metaverse, lost $13.7 billion this year, according to Wednesday's disclosure. In a few months' time, Meta CEO Mark Zuckerberg has gone from pushing the metaverse as the future of his company to it being just another long-term project. Account icon An icon in the shape of a person's head and shoulders.
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