Meta Platforms Inc.

Stock: META

Rating: Hold

Author: Waleed M. Tariq

Overview

  • Meta Platforms, Inc., conducting business as Meta, was formerly Facebook, Inc. and The Facebook, Inc.
  • The firm owns Facebook, Instagram, and WhatsApp.
  • Meta calls its integrated environment the “metaverse”

Bullish

  • Despite “founders know best,” the “company face” and top official can grow.

Bearish

  • Meta Platforms’ market value declined 25% in 6 months from a high of $380.
  • The company’s demise came after Q4 earnings showed poor growth and concerns in 2022.
  • Meta expects increased Metaverse spending, declining revenue, and fierce competition in 2022.

Downward Spiral

  • The price hovered between $320 and $350 until the results report publication, which sent it down 27% to roughly $220.
  • The drop followed Facebook’s first QoQ MAU decrease and warning for a rough 2022.

Meta’s Comeback

  • Meta is expected to return in 2022, but buying FB shares is riskier.

Reforms

  • Facebook may pay ATT $10 billion by 2022. (IDFA). iOS 14.5 prohibits unauthorized app tracking. These changes make it harder for Facebook to “trace” transactions to ads, enhancing ad budget efficiency. ID tracking and ad revenue surged on Facebook.
  • Facebook missed its earnings goal despite Apple’s ad policy adjustments. iPhone users are 62% non-trackers. Facebook must eliminate third-party tracking and respect Apple’s attribution requirements.

Metaverse over AdTech

  • Metaverse’s excessive spending without a return and the CEO’s ambition lead the company’s transformation from social media advertising to Metaverse.
  • Without focusing on MAU growth to sustain ad revenue growth, the company is letting TikTok dominate AdTech.

Conclusion

  • I wouldn’t touch FB stock right now since it’s important to acquire the appropriate security at the proper moment.