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Meta shares drop 20% on Q4 earnings miss, weak outlook

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Re: Meta shares drop 20% on Q4 earnings miss, weak outlook

#171

Post by Miraste »

rossdavidh wrote: post #118
JCM9 wrote: post #93

Facebook’s core business model appears to be in decline. They don’t have a very diversified revenue stream despite trying various side businesses. This is the market worried that Facebook’s best days are behind it. Facebook is betting the farm on the metaverse stuff but without meaningful financial results that’s not going to placate market concerns over what looks like a downhill future for the core businesses. Face…

Exactly, and unlike, say, Google or Apple, I don't think Facebook has really ever had more than one big payoff idea. If that core business model/idea has seen most of its growth, and may even decline, then there is really not much reason to expect it to find any other way to keep growing. They are big, they are profitable, but they are not going to be growing fast in the future, and one could argue should be valued (…

> unlike, say, Google or Apple, I don't think Facebook has really ever had more than one big payoff idea.

Interestingly, by revenue Apple is more of a one-trick pony than Facebook. iPhone sales are fully half their revenue, and almost all of their software income is totally dependent on iPhones as well. Meanwhile at Meta, Instagram revenue is roughly equal to Facebook revenue.

Re: Meta shares drop 20% on Q4 earnings miss, weak outlook

#172

Post by skinnymuch »

WalterBright wrote: post #78
omot wrote: post #50

Earlier quoted context omitted.

Invisible hand? Yeah maybe when you're early-stage Capitalism, in late-stage it's all about the invisible knife.

This is ironic considering that Apple displaced the former unstoppable phone monopoly. Never mind that Walmart displaced the former unstoppable Sears monopoly, and Amazon did the same to Walmart. IBM which people predicted was unstoppable, was going to rule the world. IBM's descent into irrelevance (I B What?) has been profound. The only interesting thing is people still insist that this time it's gonna be different.

It’s not helpful to say it’s inevitable if no timeline is given. If it won’t happen for 30 years, there is little point in talking about it right now. Though looking at history, when one of these tech giants do fall, a lot of people who were saying it would happen will act like prophets.

Especially funny because the downfall of Facebook has been predicted for a decade now. Since Friendster and MySpace each did not last that long.

Re: Meta shares drop 20% on Q4 earnings miss, weak outlook

#174

Post by mathattack »

dmurray wrote: post #96
gzer0 wrote: post #59

Here are the results that caused this: - Earnings per share: $3.67 vs $3.84 expected - Revenue: $33.67 billion vs $33.4 billion expected Facebook also missed estimates with user numbers. - Daily Active Users (DAUs): 1.93 billion vs 1.95 billion expected - Monthly Active Users (MAUs): 2.91 billion vs 2.95 billion expected - Average Revenue per User (ARPU): $11.57 vs $11.38 expected Future guidance was the biggest miss…

It's not really plausible that the market can predict Facebook's earnings to within 5% and that such a small miss would cause a rational investor to value Facebook 20% lower. This seems more like a symptom of the market being generally skittish, with a small side of "expected" earnings actually being a low-biased estimate, so it's more like a 10% miss.

It’s not about accuracy. If a stock is priced at a huge multiple to earnings and sales, the market consensus is enormous profit growth for a sustained period. When the slope of the curve moves (or changes direction) the NPV (Net Present Value) of future cash flows drops dramatically.

The miss is also against future guidance. This could be answering a question of “Is Facebook too distracted to grow their core business?”

Anyone who thinks they’re more rational than the market can take the other side of these large moves. (Many quant hedge funds do)

Re: Meta shares drop 20% on Q4 earnings miss, weak outlook

#175

Post by lokalfarm »

WalterBright wrote: post #112
paulryanrogers wrote: post #102

Earlier quoted context omitted.

What phone monopoly did Apple disrupt? Nokia? Symbian? Java mobile? Palm? Blackberry?

AT&T

Do you have more information about how Apple disrupted Ma Bell? It is also worth noting that the iPhone was originally released as an AT&T exclusive...

Re: Meta shares drop 20% on Q4 earnings miss, weak outlook

#176

Post by agalunar »

benlivengood wrote: post #132
ohashi wrote: post #58

Earlier quoted context omitted.

We can't be critical of a company that makes people miserable? That weakens democracy? That enables violence and hate? Just because they make a lot of money we should be cheering? Oh wow, they made $11! Let's forget everything else.

If democracy can't survive Facebook then it probably was doomed already. Similarly with trying to live in civil society when there are already fellow citizens full of violence and hatred; FB might give voice to what is already there and already broken but isn't really the cause.

Although that's sort of like saying "if an ant can't survive being scorched by a magnifying glass, it was probably doomed to burn in the sun anyway".

What you're saying may be true – I've no idea. But I'm not sure we can yet dismiss the idea that social technology like Facebook, used as it is, might push us over a line we wouldn't otherwise cross.

Re: Meta shares drop 20% on Q4 earnings miss, weak outlook

#177

Post by ErneX »

dymk wrote: post #120
mjfl wrote: post #106

Earlier quoted context omitted.

> Facebook is betting the farm on the metaverse stuff and it's an odd bet.

I've been using a roommate's Quest 2 for a few days. A few years ago I was using an OG Oculus. The Quest 2 is so much staggeringly better in every way. So much so that I can see a future where people are spending hours in VR games rather than hours playing games on a monitor. Yes, there are issues to work out with the headbands, weight, general FPS and battery life, but I finally _get_ it. The amount of badassery you…

That's not technically Quest 2 that's PC VR (a nice PC hooked to a Quest 2).

Re: Meta shares drop 20% on Q4 earnings miss, weak outlook

#178

Post by kshacker »

timmg wrote: post #9
redwood wrote: post #8

They really have us trapped with WhatsApp… difficult to figure out how to get off this platform

My friend group switched to Signal en masse. YMMV.

We had a campaign to switch to signal, it fizzled out pretty quickly. I am part of 6 active groups from school to work days, and 1 of them split and exists on both WhatsApp and Signal - signal for sports talk, WhatsApp for everything else, but every other group that tried, moved back. WhatsApp has too much "moat".

Re: Meta shares drop 20% on Q4 earnings miss, weak outlook

#179

Post by Kranar »

distrill wrote: post #76
gzer0 wrote: post #59

Here are the results that caused this: - Earnings per share: $3.67 vs $3.84 expected - Revenue: $33.67 billion vs $33.4 billion expected Facebook also missed estimates with user numbers. - Daily Active Users (DAUs): 1.93 billion vs 1.95 billion expected - Monthly Active Users (MAUs): 2.91 billion vs 2.95 billion expected - Average Revenue per User (ARPU): $11.57 vs $11.38 expected Future guidance was the biggest miss…

It's so confusing to me see headlines calling this a "huge earnings miss". Revenue was greater than expected, as was ARPU. I get that the users are under, but this seems pretty far from a huge miss, no?

Feel free to do a deep dive on the meaning and nature of earnings estimates, and you'll find it's mostly just a service that exists because it gives the appearance of legitimacy to various financial institutions. Earnings estimates do not come down from God and there's no one single earnings estimate either, different sites and sources will report different estimates. Typically it's just the average or the median of a bunch of guess work done by analysts across a bunch of different brokerages or financial institutions and they exist to give credibility to said institutions.

A basic quantitative analysis of earnings estimates reveals that they are not particularly accurate when compared to the earnings guidance given by the company itself, and in the rare cases where companies provide no guidance, estimates are almost worthless.

All this is to say don't confuse the term "Wall Street estimates" with what people who actually buy and sell stock estimate. The actual people who have skin in the game and face tangible consequences if they're wrong don't take these earnings estimates that seriously, and conversely the analysts who produce these estimates don't have much of any skin in the game themselves and suffer next to no consequences for being wrong.

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