— Chris Wang (@KungFuInvestor) July 27, 2022
Meta Platform (META
- Revenue has decelerated from +55% in 2Q21 to just 6.6% in 1Q22
- Zuckerberg says this is one of the “worst downturns that we’ve seen in recent history”
- Digital advertising getting hurt by weakening consumer and business sentiment, and ad budget cuts
- Can the company find growth in the core Facebook platform?
- Big spending in the metaverse with no expected return in short term
Google is in a more dominant position in search which has the highest ROI for advertisers and therefore gets cut last out of ad budgets. The competition in social is much fiercer and Tik Tok has been gaining share faster than anyone else. It’s no surprise that everyone is trying to emulate the Tik Tok success but changing the platform to be a copy cat risks turning away the core user base of IG and FB. They have to walk a fine line here and it is no easy task. That said Mark Zuckerburg has to be given huge credit for buying Instagram for $1B; they pivoted to mobile; so can he do it again with his bet on the metaverse – I don’t think you can bet against him but it will take a long time to play out.
For now, the big question is: what is Meta's growth rate? Right now they are facing declining earnings and the street is forecasting them to earn $13.20 in 2023 which is below their 2021 earnings number.
Are you bullish or bearish on META's growth prospects?