Meta shares drop 20% on Q4 earnings miss, weak outlook • Hacker News Board

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

#191

Post by dymk » Wed, Feb 02, 2022, 11:56 PM UTC

ErneX wrote: post #177

dymk wrote: post #120

Earlier quoted context omitted.

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).

That's true, but specific to the Quest 2 hardware is the much nicer display, lighter than its predecessor, its inside-out tracking is more convenient than setting up stationary tracking beacons (a-la Valve Index), its guardian system is nice for setting up arbitrary play areas, and it degrades more gracefully at low FPS than its predecessor by respecting 6dof of head movement at a minimum of 90fps at all times, reducing motion sickness.

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

#192

Post by NovemberWhiskey » Wed, Feb 02, 2022, 11:56 PM UTC

Miraste wrote: post #171

rossdavidh wrote: post #118

Earlier quoted context omitted.

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.

The social media website/phone app company gets half its revenue from one of its social media website/phone apps? Feel the diversification!

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

#193

Post by oblio » Wed, Feb 02, 2022, 11:56 PM UTC

Miraste wrote: post #171

rossdavidh wrote: post #118

Earlier quoted context omitted.

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.

And Google is 90% ads.

OP wanted to use "cool" companies as examples but the actually diversified giants are Microsoft and Amazon.

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

#194

Post by jpgvm » Wed, Feb 02, 2022, 11:56 PM UTC

magicjosh wrote: post #148

voidfunc wrote: post #131

Earlier quoted context omitted.

This would be an interesting but perilous pivot... trying to get into cloud infra at this point seems like an insane idea. What would even be the attraction for company to want to run on FB cloud vs one of the established players that now have a decade plus of real world operations experience from running 3rd party customer workloads? If we are spitballing ideas, If I am Zuck I'm looking at figuring out how to buy Va…

Too bad Bungie and Activision are off the table! I like these Zuck spitball ideas tho. Is the idea really that the metaverse is their big next market? I like VR but who the heck believes FB will lead it?

Well they are leading it right now and no one is really stepping up to do anything about it unfortunately.

Sony could if they were game enough to compete with the Oculus Quest and build something that would work either standalone or wirelessly with a PS5 to handle more intensive games. Same goes for MS ofc.

I think the big fuckup by FB/Meta here is not having the foresight to acquire Unity no matter the cost. They should have made a massive stock deal for it even if it caused their own stock price to take a massive hit in the short term.

The long term benefit of owning the most pervasive toolchain + the most dominant VR platform would have essentially ensured their market position for the foreseeable future. The only other engine that is half-decent for VR is Epic's UnrealEngine and there is a huge step up in complexity, pipeline etc from Unity to get there.

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

#195

Post by Miraste » Wed, Feb 02, 2022, 11:57 PM UTC

voidfunc wrote: post #131

intrepidsoldier wrote: post #71

The data center infrastructure that Facebook (Meta) has is probably in the top 5 in this world (behind only Amazon, Microsoft, Google). They might want to become a cloud infrastructure provider for some side money and buy themselves some time to figure out this Metaverse fantasy :) Hey, AWS started because Amazon wanted to lease out their spare infrastructure capacity.

This would be an interesting but perilous pivot... trying to get into cloud infra at this point seems like an insane idea. What would even be the attraction for company to want to run on FB cloud vs one of the established players that now have a decade plus of real world operations experience from running 3rd party customer workloads? If we are spitballing ideas, If I am Zuck I'm looking at figuring out how to buy Va…

They already have a gaming platform. It’s the Oculus store (soon “Meta” I imagine) and they’ve been working on it for years.

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

#196

Post by subsubzero » Wed, Feb 02, 2022, 11:57 PM UTC

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.

Plausibility has no part in this, when stocks are "priced to perfection" any blip can cause a large correction in price. I remember linkedIn when it was still public and not owned by MS missed earnings slightly and the stock tumbled 40% in the day after earnings. When you have a sky high valuation and your business model requires ever more additions of users, slowing usage and drops of revenue are a bad thing.

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

#197

Post by bee_rider » Wed, Feb 02, 2022, 11:57 PM UTC

paulpauper wrote: post #138

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…

They don’t have a very diversified revenue stream despite trying various side businesses. Google and Microsoft have had the same business model forever .

I guess it depends on how you define "forever" but the success of Azure seems to be evidence that Microsoft is fundamentally capable of pivoting to a new business model if they really need to, in a way that Facebook hasn't shown any capacity for.

Google is probably screwed if search and ads go under, but they seem to be running an interesting experiment on how low quality their search results can get before they lose marketshare...

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

#198

Post by [deleted] » Wed, Feb 02, 2022, 11:58 PM UTC

Miraste wrote: post #171

rossdavidh wrote: post #118

Earlier quoted context omitted.

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.

[deleted]

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

#199

Post by actaeon169 » Wed, Feb 02, 2022, 11:58 PM UTC

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.

The trouble with democracy is, and always was, the demos

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

#200

Post by tmccrary55 » Wed, Feb 02, 2022, 11:58 PM UTC

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.

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