meta platforms (WKN: A1JWVX) is struggling with the current market environment. Social networks like Facebook and Instagram thrive on digital advertising. Now that we are in a downturn, it is correspondingly more difficult to keep turnover at the level of previous years.
We saw that very clearly in the last quarterly figures: Meta Platforms is currently on a contraction course. However, the result is at least in part due to the management around Mark Zuckerberg investing so heavily in the Metaverse.
Personal and the Metaverse are our two relevant things today. Apparently only one thing is a priority for top management, the other needs to be explored even further. Here the details.
Metaplatforms: personal is not a high priority
At the moment, there are interesting headlines surrounding Meta Platforms. Top management is apparently planning mass layoffs at the group. The staff needs to cancel business trips and be done. The outlook for employees is not good, although it has already been announced from business circles that cutbacks will be made.
However, the following statement is of particular interest to me in this regard: According to CEO Mark Zuckerberg, Meta Platforms will only make investments in so-called high-priority areas. Most of the other teams will probably stay more or less where they are for the next year. Or even shrink.
In concrete terms, this means that personnel is not a high priority, which we can leave as it is for the time being. But also that the Metaverse, which is a clear, high priority for Mark Zuckerberg, will continue to be served en masse. And this despite the fact that the core business is currently weakening and the operational turnaround is also related to these loss-making investments.
Patience… and a high roller bet
Meta Platforms and especially the management team around Mark Zuckerberg venture into the high roller bet. They swear to investors not only to be patient. No, even in difficult times they continue to place a high investment volume on a strategic question mark. After all, the Metaverse is not yet such a mature market that we can safely speak of a billion-dollar potential.
That still raises questions. For example, whether management itself sees the integrity of its own social networks at risk and therefore invests in opening up a new market. In general, social networks such as Facebook, WhatsApp and Instagram continue to do great business. Nevertheless: the priorities are still a mystery. In any case, investors should be prepared for difficult times. Anyway, the staff should have been warned.
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Vincent owns stock in Meta Platforms. The Motley Fool owns shares of stock in and recommends Meta Platforms.