Settlements and headsetsMeta had a busy start to the week, and – as is typical in the world of Zuck – we’ve got both good and bad vibes going on here.
- Let’s start with the lawsuit. On Tuesday, Meta settled a lawsuit with the DOJ over a housing advertising tool that discriminated against users based on characteristics like race, religion, and gender, which is v illegal.
- While Meta denied wrongdoing, it also agreed to pay a $115k civil penalty – the highest possible fine under the law – and to stop using the ad system. Regulators have been hounding Meta since 2016 over its algorithmic bias, and this is the first change the brand has made to address those allegations. A little progress every day adds up to big results, so they say.
- Meta also gave consumers a slew of new toys. First up, the company launched a new suite of Facebook and Instagram monetization tools for creators to make money. As well as that, Mark Zuckerberg gave a fun little demo of all the VR headsets he wanted to show us (there are a lot), so hopefully its struggling Reality Labs division will benefit from that.
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Sheryl says see yaMark Zuckerberg is saying goodbye to one of his closest lieutenants and Meta loses one of its long-standing key execs.
- Sheryl Sandberg is stepping down as the Chief Operating Officer of Meta after 14 years at the helm, representing a major shakeup of the brand’s leadership team. Sandberg will remain on the board after leaving in the fall, but – honestly –investors seem to have been expecting her departure for a while now.
- Even so, shares slumped 5% in a late day decline to close down 2.58% on the day, and it's worth noting that Meta’s stock is down over 51% from its September high, which is pretty much when it announced its historic rebrand – worse than the Nasdaq’s 26% decline in the same period.
- Meta will take its final rebranding step on June 9, when its trading name will finally take on a new title under the ticker META – they initially wanted to trade under MVRS but that ticker was taken already. Soz Zuck. Hopefully the rest of its transition into virtual reality goes a bit smoother.
World Economic Forum / Wikimedia Commons
A new era dawns for the thirst trapInstagram is set to support NFTs from Ethereum et al as Meta makes a further push into AR and the metaverse.
- NFTs could be coming to Instagram as early as this week, jumping on the mega-popularity demonstrated by projects like Crypto Punks, Bored Ape Yacht Club, and Moonbirds. Unlike Twitter, Instagram will not charge users for posting and sharing these NFTs.
- Polygon, Solana, and Flow-based NFTs will also be included, though no date has been set in stone yet. Zuck hinted that Facebook will be next to integrate, since Meta has big plans for its metaverse, and NFTs are a part of that.
- Instagram will allow 3D augmented reality NFTs (whatever that means) to be used on users’ stories. That’s right – soon you’ll be able to upload your very own minted NFT overlay on a Boomerang of your Friday-night cocktails nobody cares about. So, yeah. The market may be crashing before our very eyes, but at least we have Mark Zuckerberg.
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An earnings MetamorphosisMeta earnings manage to make a comeback from last quarter's mishap – it’s not all sunshine and rainbows, but apparently Facebook still has legs to it, so there’s that.
- Meta shares shot up by 18% in extended trading on Wednesday after the platform reported an average but estimate-beating Q1. Meta topped on the bottom line with EPS of $2.72, but missed on the top with revenues that were up 7% to hit $27.91bn – its slowest revenue growth since IPO.
- Facebook saw user growth once again, much to the relief of investors, who worried the platform was sooo 2000s now that the young’uns have taken their ad revenue to TikTok. Daily active users beat estimates and increased to 1.96bn, but it’s worth noting that Reality Labs (the Metaverse division) posted a 2.9bn loss for Q1, 61% higher than last quarter's loss.
- Will this momentum continue? Current quarter guidance of $30bn was lower than expected, and Meta says it's still contending with the war in Ukraine, which will affect global user count. The impact of Apple’s privacy changes are also still lingering, but the brand reckons it has a competitive advantage in the advertising world, so let’s see.
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Meta opens an oxymoron storeMeta steps out of the metaverse and back into the real world as it opens a store selling hardware products.
- Get ready for the IRL “Meta Store”, set to open on May 9 in California. This comes as Zuck’s recently rebranded company tries to establish itself as the leader of the metaverse revolution.
- We certainly didn’t see a brick and mortar store coming out of Meta HQ. However, this isn’t your typical shop – customers will be able to enjoy the try-before-you-buy model setup in store, and can try anything from VR headsets to Ray-Ban smart glasses.
- The stock traded up a modest 1.5% on Monday, bouncing with the majority of the market after a sluggish last week that saw the broader market dip in preparation for big tech earnings this week – almost half of the Nasdaq’s total weight will report in the next couple days, with investors hoping Meta fares better than last szn.
Get ready for Zuck BucksYou know what they say: if at first you don’t succeed, try, try again. Well, it seems Mark Zuckerberg has made that the slogan of his crypto efforts.
- Meta has plans for a new virtual currency, affectionately called “Zuck Bucks” by staff. The social media giant wants to introduce virtual coins, tokens, creator coins, and lending services to a bunch of its apps that can be used in its new metaverse.
- It comes after the brand’s crypto venture, Diem, called it quits earlier this year after getting blocked by regulators at literally every turn. Meta is diverging from a typical blockchain-based cryptocurrency this time, instead looking at in-app tokens that are centrally controlled by the company – similar to Robux in Roblox games.
- Will this bring the fans flocking back? As most of us will know from Meta’s infamous earnings report in Feb (which sent the stock crashing), the firm is struggling to attract and retain users, so it needs to explore further revenue streams and spice up its platforms.
Shubham Dhage / Unsplash
Meta gets ready to mint NFTsGood old Zuck is always trying to be one step ahead, and now he wants to lead his platforms into the NFT revolution.
🔍 Key points:
- Meta has plans in the works to launch its own NFT products, reportedly looking at how to bake non-fungibles into Instagram shortly, as in the next few months.
- It also wants to let users mint their own NFTs. Meta wants to become a major player in the $40bn NFT market, and Zuck said that “soon” people will be able to create their own assets and sell them across Meta platforms.
- It’s not the company’s first foray into crypto, though. Meta spent the last few years taking a crack at its own digital currency, Diem, but basically it was a big fail, so investors are hoping it’s learned its lesson.
Anthony Quintano / Wikimedia Commons
Meta makes Russia madMeta makes a decision on hate speech towards Russia, so Russian prosecutors move to declare it an “extremist organization”.
🔍 Key points:
- Meta changed its free speech policies last week to allow residents in 12 Eastern European countries to call for violence against Russian soldiers and those that are leading them – Meta would usually take down content like that, but it’s making a temporary exception.
- Unsurprisingly Russia wasn’t happy and has opened a criminal case against the tech giant. Prosecutors now want to label Meta an “extremist organization”, accusing its employees of “illegal calls for murder and violence” while Russian soldiers escalate their military operations in Ukraine.
- And Russia’s not stopping there. It’s also banned Instagram across the country as of midnight on Sunday. Twitter and Facebook have been inaccessible since early March, and big companies continue to pull their operations from Russia.
Illustration by TradingView
Will more users save Meta’s market cap?Meta’s virtual world is racking up the users, but will that be enough to help it recover from its fall from grace?
- Meta’s VR world has seen its users jump tenfold in the last three months. Since Horizon Worlds, which Zuck called the “core to our metaverse vision”, was rolled out across the U.S. and Canada in December, its monthly user count has jumped to 300k.
- It’s not monetizing Horizon Worlds yet, but its growth is closely linked to its Reality Labs division, which covers its Oculus headsets – Reality Labs brought in $877m in Q4 profit but reported mega losses of $3.3bn in Q4, so investors are hoping more users means more $$$.
- Speaking of Q4, its disastrous earnings are still taking a toll. Meta has lost its spot among the world’s top 10 most valuable companies, now trailing China’s Tencent (700) with a $561bn market cap, down over 37% since releasing its earnings on February 2.
Dim Gunger / Unsplash
Meta lays down the lawMeta might still be mourning its earnings losses, but it’s hoping it can win back favor by making some much called for improvements in its virtual platforms.
- Meta has introduced “personal boundaries” to its virtual worlds after accusations of harassment started surfacing and highlighting inappropriate behaviour on the platform – your avatar’s hands will now disappear if you get too close to another.
- It’s stock extended its earnings-induced losses on Friday to end the week down 21%, so it’s likely trying to make sure it’s proactively heading off any more scandals that could arise while it tries to recover.
- Speaking of personal boundaries, Meta is also enforcing its own by threatening to pull Facebook and Instagram from Europe if it’s not allowed to keep transferring user data back to the U.S.
Anthony Quintano / Wikipedia Commons
The Metapolis has a shrinking populationThe mighty Meta releases a Q4 report that makes people question its strength for the first time.
- Over $200bn was wiped off Meta’s market cap thanks its 24% drop in prices after EPS of $3.67 saw a rare miss, though revenue of $33.67bn juuuuust beat estimates. Q1 won’t be much better – it forecast revenue of up to $29bn when analysts thought it would top $30bn.
- Its daily user count declined for the first time ever thanks to “increased competition for people’s time”, particularly from TikTok. Daily active users of 1.93bn were less than the 1.95bn analysts hoped for.
- The Metaverse incurred mega losses. Its Reality Labs division, the heart of its Metaverse and VR headset efforts, brought in $877m in profit but reported losses of $3.3bn in Q4 and over $10bn in 2021 – investors hoped it would be Meta’s new revenue oasis thanks to big headset sales, but appaz not yet.
Jiuguang Wang / Wikimedia Commons
Dorsey dumps on DiemJack Dorsey delivers a big fat “I told you so” to Meta as it dumps its Diem currency.
- Meta is selling off its Diem-related assets to Silvergate for $200m, throwing in the towel after years of congressional hearings, rebrands, exec departures and delays.
- “There was a lot of wasted effort and time there”, said outspoken Bitcoin bull Jack Dorsey, arguing that Meta would have found success if it had invested in the Bitcoin ecosystem instead.
- Does its crypto failure spell bad news for its Metaverse dreams? People think it’s an indication that Meta struggles with developing new services without buying them – which wouldn’t bode well for the Metaverse pivot that Zuck has based the firms’ entire future on.
Mark Warner / Wikimedia Commons
Meta can’t carpe its Diem anymoreBloomberg sources say Meta may be giving up on seizing the stablecoin day and dumping its Diem dreams.
- Zuck could finally be bringing the Diem drama to an end. Bloomberg sources say the Diem Association is considering selling off its assets and intellectual property and giving up on its digital dollar idea.
- The project has faced non-stop regulatory opposition since it was first announced in 2019 under the name “Libra”, and no matter what concessions Meta has made, people are determined the stablecoin would endanger privacy and monetary sovereignty.
- Its crypto dreams aren’t all dead – it managed to launch its Novi Wallet in November, and it’s recently said NFTs will be coming to their social channels soon.
BTC Keychain / Flickr
Hal, is that you?Meta unveils its latest AI supercomputer, hoping the new release will open the pod bay doors to a stream of revenue.
- The social media giant built a new artificial intelligence supercomputer, which it says will be the fastest in the world when it’s completed this year.
- It’s going to “pave the way” to the Metaverse. As Intel exec Raja Koduri pointed out, the world needs a 1,000-fold increase in computing power to run the Metaverse, so here it is.
- AI has become integral to tech, with giants like Microsoft (MSFT) and Nvidia (NVDA) also announcing their own AI supercomputers, leaving only one question: will any of them turn on us when the singularity happens?
Meta makes its move into NFTsGet ready for the NFT craze to hit your Insta page.
- Meta wants to bring NFTs to its platforms, letting users create, display, and sell their digital art pieces on Facebook and Instagram.
- It’s Meta’s first foray into the new trend, and would be the biggest public show of support for NFTs to date if it all goes ahead – Zuckerberg has said he thinks NFTs will be a key player in the Metaverse.
- It will solidify NFTs place in the commercial market, though perhaps they don’t need Meta’s help for that considering trading volume on NFT marketplace OpenSea just notched a new monthly record of $3.5bn in sales.
Mick Haupt / Unsplash
There can only be oneMeta is making sure there’s no confusion as to who is leading the Metaverse revolution.
- It’s behind a $60m deal to buy the trademark for its namesake bank, Meta Financial Group (CASH).
- There’s been some less official trademark stuff going on. Reports have hit of a social media handle named “metaverse”, who noticed their account mysteriously disappear following the rebrand.
- The market is reaching “peak Metaverse hype” following Meta’s rebrand, but analysts warn it could be years before the concept is fully realized. Slow and steady wins the race, as they say.
David Menidrey / Unsplash
Can crypto be saved?WhatsApp is wading into the world of crypto as Meta continues to slowly navigate its own digital asset attempts.
- WhatsApp is trialling in-app cryptocurrency payments for some people in the U.S. using the Meta-owned Novi wallet, which lets people send money internationally without fees.
- Regulators aren’t on board. In October, the Democrats called for Meta (then Facebook) to halt its Novi Wallet launch because they didn't trust it with managing money.
- The rest of its crypto house is crumbling. It’s Diem currency is in limbo after months of pushback and regulatory backlash, and it's just lost one of its key execs.
There’s an app for thatMeta takes a giant leap into (you guessed it) the Metaverse with a new app release.
- It’s opening up Horizon Worlds, its long-awaited free app that lets your avatars socialize in VR, to anyone with its headset in the U.S. Previously, you needed an invitation to get in.
- It’s not a fully fleshed out Metaverse, but it's a big step towards bringing its vision to life. The business is going to spend $10bn in the next year to develop Metaverse tech.
- Bill Gates is with the bulls. He thinks all office meetings will be happening in the Metaverse within a few years.
Another day another departureMeta’s Messenger boss becomes the latest in a long list of execs jumping ship.
- Stan Chudnovksy is leaving Meta in 2022 after over three years running its Messenger segment.
- It’s an executive exodus. To name but a few, it’s seen Mark D’Arcy step down as creative guru, Kevin Weil and David Marcus have deserted its crypto efforts, and CTO Mike Schroepfer stepped down.
- Prices are still up 17% this year, despite the leadership upheaval and increasing regulatory scrutiny.
Meta loses its magicA rocky market atmosphere has people racing for a safe bet – and apparently, that’s not Meta.
- Meta hit a seven-month low on Friday after losing almost 8% during an Omicron-plagued week.
- It officially entered bear market territory after sinking over 20% in the last three months despite a modest rally on the back of its rebrand.
- A mixed economy has led to a risk averse market. The Fed is accelerating its tapering schedule and the world is still processing the effects of the new Covid strain.