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"Meta" .. the company that lost 800 billion dollars

The market value of "Facebook" was a trillion dollars before rebranding itself "Meta".

Reuters

Previously, the market value of "Facebook" was a trillion dollars more than a year ago, before the company decided to rename itself "Meta", and its market value has decreased since then by about 800 billion dollars.

Recently, companies like Amazon, Alphabet, and most of the giants except Apple have shrunk in value, evaporating trillions of dollars in Silicon Valley.

But no company looks as bleak these days as Meta, whose stock price has fallen since last September.

Although many of the biggest losers in modern market history have learned how to win again, the bad news about Meta is that it doesn't have much in common with those companies. It scares investors. Companies change strategies when they lose, but Meta lose because they Strategies changed.

It's been almost a year since CEO and co-founder Mark Zuckerberg made a daring maneuver to rename his company "Facebook" as Meta, because he believed the company's future wasn't in social media, but in Metaverse.

But the decision to place so much faith in such an unproven hypothesis is one of the most dangerous bets any company has ever taken, no matter what happens next.

The evaporation of $800 billion from market capitalization wasn't particularly smart, which is helpful to think of Meta and other tech companies because of the nature of their business.

Last year, Zuckerberg announced that he wanted Facebook to turn into Metaverse, but last week, after Meta reported another dismal earnings quarter, the CEO reiterated that he was determined to go the same way. .

"People will look back decades from now and talk about the importance of the work that has been done here," he said.

The Wall Street Journal reported that Zuckerberg could be right about Metaverse, and that the company's stock price would be a long-term bargain.

Zuckerberg had said it would take patience and trust.

The operating losses of the Metaverse division amounted to $3.7 billion during the third quarter of this year.

Meta's chief financial officer said he expects "operating losses to increase significantly in 2023."

The market reacted appropriately to this comment, as Meta stock is now trading at its lowest price since 2016.

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