CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 78.1% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
US English

Facebook metaverse investment mocked after Zuckerberg avatar selfie dud

By Daniela Ešnerová

11:00, 19 August 2022

Avatar of Mark Zuckerberg from Horizon Worlds
Some commentators likened Facebook’s metaverse graphics to that of games from the early 2000s. – Photo: Facebook

Facebook/Meta Platforms (META) became a target of mockery online after its boss Mark Zuckerberg shared his avatar from the company’s metaverse platform, and people were not impressed. 

The screenshot from META's immersive social experience Horizon Worlds, which revealed a rather plain graphic, had people questioning whether the hefty investments that the tech giant has been piling into the metaverse development, is paying off.

Last October, Zuckerberg publicly took it upon himself and his company to take the world to “a time when basically immersive digital worlds [would] become the primary way that we live our lives and spend our time,” and spent $10bn on this goal. 

Meta Platforms Inc. (META) price chart

At the time Facebook rebranded as Meta Platforms, signaling the company's commitment to the metaverse.

Last month, Meta's virtual reality division, Reality Labs, launched in 2019, posted a £2.8bn loss for Q2 2022, following a nearly $3bn loss in the previous quarter.

The figures had Needham entertainment and internet analyst, Laura Martin, worried that the rate at which the tech giant's costs grow will greatly outpace META's revenue growth in the coming years.

RDDT

49.39 Price
-13.870% 1D Chg, %
Long position overnight fee -0.0262%
Short position overnight fee 0.0040%
Overnight fee time 21:00 (UTC)
Spread 0.34

NVDA

901.54 Price
+0.030% 1D Chg, %
Long position overnight fee -0.0262%
Short position overnight fee 0.0040%
Overnight fee time 21:00 (UTC)
Spread 0.29

TSLA

175.31 Price
-2.440% 1D Chg, %
Long position overnight fee -0.0262%
Short position overnight fee 0.0040%
Overnight fee time 21:00 (UTC)
Spread 0.26

WEEDca

11.66 Price
-10.320% 1D Chg, %
Long position overnight fee -0.0255%
Short position overnight fee 0.0036%
Overnight fee time 21:00 (UTC)
Spread 0.10

Martin downgraded her rating for the tech giant from “buy” to “sell”.

“We lower our estimates because we believe cost growth will far exceed revenue growth for the next two years,” she reasoned, adding that the company's metaverse investment concerned her.

Brian White, an analyst at Monness, Crespi & Hardt, believed in more long-term prospects of META's metaverse efforts. Still, he cautioned that the firm will likely feel the pains of the macroeconomic environment in the more immediate term. White lowered the price estimate for the social media giant ahead of the latest earnings report but maintained a “buy” rating for the company.

“We believe Meta will continue to benefit from the long-term digital ad trend, participate in accelerated digital transformation, innovate in the metaverse, and repurchase stock at a generous pace; however, the economy appears to be on the brink of a recession, regulatory headwinds persist, equity markets are in turmoil, and we expect the geopolitical landscape will grow more treacherous,” he wrote.

Markets in this article

META
Meta Platforms Inc (Extended Hours)
486.85 USD
-7.65 -1.550%

Related topics

Rate this article

Related reading

Capital Com is an execution-only service provider. The material provided in this article is for information purposes only and should not be understood as investment advice. Any opinion that may be provided on this page does not constitute a recommendation by Capital Com or its agents and has not been prepared in accordance with the legal requirements designed to promote investment research independence. While the information in this communication, or on which this communication is based, has been obtained from sources that Capital.com believes to be reliable and accurate, it has not undergone independent verification. No representation or warranty, whether expressed or implied, is made as to the accuracy or completeness of any information obtained from third parties. If you rely on the information on this page, then you do so entirely at your own risk.

Still looking for a broker you can trust?

Join the 580.000+ traders worldwide that chose to trade with Capital.com

1. Create & verify your account 2. Make your first deposit 3. You’re all set. Start trading