• HARRY ROBERTSON SHARES in Meta, the company formerly known as Facebook, plunged 22% in premarket trading yesterday after it disappointed investors with weak fourth-quarter earnings that showed daily users falling for the first time ever.
The social media giant’s stock was down 21,55% in premarket trading at US$253,40 as of 04h02 ET, having closed on Wednesday at US$323.
Meta chief executive Mark Zuckerberg said earnings were likely to stay under pressure, not least due to competition from other social media apps such as TikTok.
“People have a lot of choices for how they want to spend their time, and apps like TikTok are growing very quickly,” Zuckerberg said.
Meta’s profit came in at US$10,3 billion in the fourth quarter, the tech giant said in its after-hours earnings report on Wednesday, giving earnings per share of US$3,67.
Analysts polled by Bloomberg had expected EPS of US$3,84.
Facebook’s daily active users fell to 1,93 billion, the first quarterly decline on record. Analysts had been expecting a figure of 1,95 billion.
Worryingly for investors, Meta issued some tepid guidance for the first quarter. It expects revenue to come in at US$27 billion to US$29 billion, down from US$33,67 billion in the fourth quarter and below market expectations.
“Investors were understandably troubled by the results, made worse by news that the current quarter was coming with a host of headwinds – not least of which being uncertainty about advertising budgets,” said Laura Hoy, equity analyst broker at Hargreaves Lansdown.
– Business Insider US
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