The shares of Facebook’s parent firm were hammered after a poor earnings report revealed that Apple’s ad-blocking improvements are slashing billions from the company’s books, and the company’s main asset — the Facebook platform — has slowed and even decreased this quarter. The company’s shares plummeted by more than 26%, resulting in a $230 billion market value fall and a $31 billion drop in Zuckerberg’s personal wealth. According to several analysts, this was the largest single-day decline in a company’s market capitalization history.
The firm’s bad luck couldn’t have come at a worse moment; as Facebook attempts to pivot the larger corporation toward the “metaverse,” they also revealed that they spent over $10 billion on the project – money they don’t expect to recoup anytime soon. While Meta continues to ship Quest headgear, there appears to be little interest in the company’s Horizon Worlds platform, and there are few shortcuts to finding an audience on an unproven hardware platform.
The world of augmented reality and virtual reality is proving to be a difficult place to do business. Apple has repeatedly postponed its own headset. Insider reported this week on Microsoft’s HoloLens division’s troubles, revealing that the company was shelving plans for a third-generation device due to a lack of clarity in its route toward being a competitor in the untapped consumer AR field.
Meanwhile, engineers got a sneak peek of Magic Leap’s next-generation hardware. Industry analyst Karl Guttag explains how Magic Leap has steered clear of numerous key technologies for which it raised billions of dollars with its latest gear, which he says would “blast away” the HoloLens 2 in terms of image quality.
The point is that this stuff is difficult, and those who have been working on it in public are suffering even as they spend billions on research and development. Meta has no easy route ahead of them; they must forge ahead where others have failed and maintain the rest of their company united while doing so. While Meta’s week was a complete disaster, Snap’s stock had a bizarre change of fortunes, with its stock plummeting and then quickly rebounding hours later. The double-digit decrease was caused by Meta’s earnings announcement, which investors thought would signal a wider revenue downturn among social media businesses. Snap’s stock soared after the company revealed a good bottom line in its earnings report, gaining about 60% on Friday.