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

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

#411

Post by paxys » Thu, Feb 03, 2022, 2:33 AM UTC

PascLeRasc wrote: post #296

asd88 wrote: post #243

Earlier quoted context omitted.

Some of the companies whose stock price has been affected the most are making up for the loss by giving more stock. I’d expect Facebook to do the same to retain their talent if the stock drops significantly.

Off topic: when companies give out stock like this, where is it coming from? Are they printing shares out of thin air or buying back shares to give to employees?

Cash-rich companies (especially the large tech ones) do share buybacks very regularly. Facebook bought back $14.4B worth of shares in Q3 2021, and announced a further $50B worth of buybacks in the coming quarters (https://www.yahoo.com/now/facebook-warns-fourth-quarter-head...). Diluting existing shares to give out employee bonuses are comparatively a drop in the bucket.

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

#412

Post by aylmao » Thu, Feb 03, 2022, 2:34 AM UTC

codingkev wrote: post #22

fdgsdfogijq wrote: post #15

This explains the shift to Meta. The current company is basically dying, and so they are going to bet the house on something new. Apple really did a number on them by restricting the data they can collect

Facebook is dying slowly in the developed world, that is true. However it is still growing in emerging markets. And most importantly: FB is still generating tons of cash to fund the other assets. WhatsApp has basically zero monetization right now but billions of users. Huge potential cash cow. Instagram still has a ton of potential for further optimized monetization. Think fully embedded 1-click buying for things lik…

I largely agree with you, though I'm also rather skeptical.

> Facebook is dying slowly in the developed world, that is true. However it is still growing in emerging markets.

+1, though this is a slow and not necessarily viable bet. Meta makes about 12x more revenue from their USA/Canada ($52/Q) users than their Asia-Pacific users for example ($4.3/Q).

Market share in the USA is extremely valuable, not only for Meta, but for a lot of companies. Apple for example sits at a $3 trillion market cap in spite of Android dominating the global mobile market because iOS captures not the most users, but the most valuable.

> WhatsApp has basically zero monetization right now but billions of users. Huge potential cash cow.

I agree with this. I think there's a lot of potential in WhatsApp, though I also see two shortcomings with betting too much on it:

- WhatsApp is largely used in countries where users are harder to monetize. As stated above, user count matters, but it's not the only factor when it comes to generating revenue.

- Messaging is very competitive. A change in WhatsApp's TOS was widely reported to have triggered millions of new user sign ups on Telegram and Signal after just a few weeks [1]. I don't how accurate or overblown this correlation might be, but I do know anecdotally I text people through many different apps, and have switched the primary app I used to text different people multiple times in the last few years.

> Instagram still has a ton of potential for further optimized monetization.

I think this is still the most straight-forward path to increasing revenue Meta has, and I imagine they're trying to make sure it doesn't fade away like Facebook is.

[1]: https://www.theguardian.com/technology/2021/jan/24/whatsapp-...

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

#413

Post by paxys » Thu, Feb 03, 2022, 2:37 AM UTC

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.

Spare data center capacity is worthless on its own. AWS and others have 15+ years worth of investments in infrastructure and services on top of it, and Facebook needs to have all of that and more to become a real public cloud. It is going to be next to impossible for them to catch up to the dozens of players already in that space.

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

#414

Post by JKCalhoun » Thu, Feb 03, 2022, 2:41 AM UTC

mjfl wrote: post #106

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…

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

I'm all in if they get behind the power glove.

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

#415

Post by chaostheory » Thu, Feb 03, 2022, 2:43 AM UTC

evilantnie wrote: post #218

jmknoll wrote: post #150

Earlier quoted context omitted.

I’m with you on this. I received a Quest as a Christmas gift and basically went from 0 to 100 on VR and the Metaverse. It finally makes sense to me. Like you say, there are some issues with the tech, but they’ll be resolved in time, and it’s clear that this is the future of gaming at least, and maybe much of social media/virtual interaction.

I'd be curious if you feel the same way in a year or so. When I first got into VR I felt very strongly it was the future, but that novelty wore off over the course of a year. I go back every few months to catch up on experiences I've missed and try out new tech, but the novelty has still worn off. VR is not a daily use experience for me, and I assume for a lot of consumers, but it is still amazing.

The novelty hasn't worn off for me because I don't treat it as a game console. I treat it as a new form factor computer.

I use it daily for HIIT workouts, and I use it to spend time with family and friends who are either far away or busy with life i.e. kids. It's way better than FaceTime or Zoom.

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

#416

Post by zepto » Thu, Feb 03, 2022, 2:45 AM UTC

kritiko wrote: post #293

zepto wrote: post #248

Earlier quoted context omitted.

Facebook is all ads, and Apple is much less dependent on the iPhone than it was before, and is continuing in the right direction.

Probably the most interesting thing Apple has going for investors is their move into advertising within iOS - and they’re kneecapping the competition through ATT.

They haven’t moved into advertising within iOS - that seems to be a popular falsehood these days.

And they have steadily introduced new revenue streams such as Watch, Music, TV+. Services is where it is at.

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

#417

Post by aierou » Thu, Feb 03, 2022, 2:45 AM UTC

ohashi wrote: post #387

aierou wrote: post #217

Earlier quoted context omitted.

What, does public opinion shield you from the burden of proof? These are outrageous claims. I pray for legislation to put this all to rest.

https://www.theguardian.com/technology/2021/sep/14/facebook-... https://www.techtransparencyproject.org/articles/white-supre... https://www.reuters.com/article/usa-election-facebook-russia... So outrageous it's easy to find evidence for all of them?

Evidence is a horribly abused term. Do you really believe any of this would admissible in a court of law?

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

#418

Post by zepto » Thu, Feb 03, 2022, 2:46 AM UTC

rdtwo wrote: post #314

newsclues wrote: post #277

Earlier quoted context omitted.

I think the key is that youth are going to TikTok and not Facebook. They lost the next generation of kids!

Yeah idk I thought the same last time but somehow Facebook always comes back buy buying everything And copying everyone

They can’t buy TikTok, and it’s too late to copy it.

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

#419

Post by mastazi » Thu, Feb 03, 2022, 2:46 AM UTC

wombat-man wrote: post #265

mastazi wrote: post #221

Earlier quoted context omitted.

Google is not really that diversified, most of the revenue comes from ads. Microsoft is a better example of a diversified business, and IMHO Amazon would be another good example. Edit: sure, it's true that they put ads on everything, from YouTube videos to Gmail mailboxes, but that's not comparable to the level of diversification that MSFT or AMZN have IMHO.

They also run the biggest ad network. If you want to put ads on your site or app, they make it easy.

Yes, that's true, when we refer to ads we have to consider both internal properties and external.

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

#420

Post by rdtwo » Thu, Feb 03, 2022, 2:48 AM UTC

zepto wrote: post #418

rdtwo wrote: post #314

Earlier quoted context omitted.

Yeah idk I thought the same last time but somehow Facebook always comes back buy buying everything And copying everyone

They can’t buy TikTok, and it’s too late to copy it.

Probably not but the TikTok has to pivot before they loose steam and start being a coglomorate otherwise they Will eventually fade so it depends on how successfully they execute this. Meantime Facebook just needs to catch the next TikTok to be relevant again.