Facebook owner Meta's shares slump on earnings and costs
A rise in costs, headwinds from a failure to improve monetisation, and regulatory issues around access are all conspiring to drag down earnings at Meta Platforms. Both earnings and revenues were behind forecasts.
(Video Transcript)
Meta crashes nearly 21%
Another big mover was Meta last night. We did see the Facebook parent company crash almost 21% in extended trade as it continues to feel the heat of regulation, the fallout from social media intrusion, and the inability to continue to maximize its monetisation potential.
Meta chart
I wanted to show you the chart here for Meta because it's a pretty dramatic decline that we have seen here. The big downside move here on the daily timeframe highlighting the break that we see in the weekly through this key support level, 12289, that brings the lowest level that we've seen in Meta stock for over six years now.
So this is a major collapse that we're seeing in this stock and it really does provide warning signs for a number of tech stocks that are hoping to maintain valuations based on previous earnings and revenues.
When you've got high multiples and you're now no longer creating those same kind of levels, whereas people are pricing in higher growth in the future, then you're going to have potentially big problems and that's exactly what we're seeing here for Facebook.
EPS
In terms of its numbers, we did see earnings per share (EPS) of $1.64 versus expectations of $1.93 for earnings per share. Revenues were at $27.71 billion versus estimations of $27.57bn.
In terms of active users, that's one thing that people have been keeping an eye out for..We did see it come in largely as expected.
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
Seize a share opportunity today
Go long or short on thousands of international stocks.
- Increase your market exposure with leverage
- Get spreads from just 0.1% on major global shares
- Trade CFDs straight into order books with direct market access
Live prices on most popular markets
- Forex
- Shares
- Indices
