The Facebook parent spent $25 billion on R&D this year but made $84 billion. The stock charts may seem dire, but they don’t tell the full story
It felt like a Liz Truss moment. After Mark Zuckerberg pledged to keep sinking billions into an unproven Metaverse, the market revolted on Wednesday. Meta stock dropped 20% and kept falling on Thursday. The company’s now down 71% this year. It’s lost more than $700 billion in market cap and Zuckerberg’s lost $100 billion of his personal fortune. Investors who counted on the company felt ignored, betrayed, and pissed. Jim Cramer nearly cried on air.
But Zuckerberg’s program — unlike that of the erstwhile British PM — is funded, backed by the proceeds of a profitable, high-margin ad business that won’t force him to quit. Despite revenue contracting somewhat, Meta made $27 billion in the third quarter and $5 billion in profit. It’s earned $84 billion this year and spent $25 billion on R&D. Zuckerberg, with a special class of voting shares, has total control of the company. He’s not going anywhere and can keep doubling down on the Metaverse. It appears he will.