The forecast knocked about $67 billion off Meta’s stock market value in extended trade, adding to the more than half a trillion dollars in value already lost this year
Facebook parent Meta Platforms Inc on Wednesday forecast a weak holiday quarter and significantly more costs next year, sending shares down nearly 20% as investors voiced scepticism about the company’s pricey metaverse bets.
The forecast knocked about $67 billion off Meta’s stock market value in extended trade, adding to the more than half a trillion dollars in value already lost this year.
If Meta’s after-hours stock rout is matched in Thursday’s trading session, it will have been its deepest one-day loss since Feb. 2, when the company last issued a dismal forecast.
The disappointing outlook comes as Meta is contending with slowing global economic growth, competition from TikTok, privacy changes from Apple, concerns about massive spending on the metaverse and the ever-present threat of regulation.
Executives announced plans to consolidate offices and said Meta would keep headcount flat through the end of 2023.
Revenue fell 4% in the third quarter ended Sept. 30. That deepened a revenue decline begun the previous quarter, when the company posted a first-ever revenue drop of 0.9%, although it was less steep than the 5.6% decline Wall Street had expected, according to IBES data from Refinitiv.
More troubling was the company’s estimate that fourth-quarter revenue would be in the range of $30 billion to $32.5 billion, mostly under analysts’ estimates of $32.2 billion, according to the Refinitiv data.
Meta also forecast that its full-year 2023 total expenses would be $96 billion to $101 billion, significantly higher than a revised estimate for 2022 total expenses of $85 billion to $87 billion.
That includes an estimated $2.9 billion in charges over the course of both 2022 and 2023 from the office downsizing.
It also forecast that operating losses associated with the Reality Labs unit responsible for its metaverse investments would grow in 2023 and pledged to “pace” investments after that.
Total costs for the third quarter came in above estimates at $22.1 billion, compared with $18.6 billion the year prior.
