- The market was panicking about Facebook’s slowing revenue and growing expenses in 2018, but the reaction was overblown.
- Facebook’s stock price increased by 118% between 2018 and 2021, but has since decreased by 42%.
- Despite speculation, users are not deserting Facebook, Instagram engagement is not plummeting, and TikTok is not dominating.
- Facebook is still adding users, Instagram has more than 2 billion monthly actives, and Reels usage is growing quickly.
- TikTok usage is depressing growth, but is growing the overall pie for user-generated content, and is not infringing on Meta’s business.
- Myth 1: Meta’s Stock Price is a Reflection of its Business Performance – While Meta’s stock price has dropped significantly, it is not necessarily an accurate reflection of the company’s performance.
- Myth 2: Meta is Losing Money – While Meta’s revenue has decreased, it is still making money.
- Myth 3: Meta is Becoming Less Relevant – While Meta’s advertising model has been impacted by Apple’s App Tracking Transparency policy, digital advertising is still growing strongly and Meta is adapting to the new reality.
- Myth 4: Advertising is Dying – Advertising is not dying, but Apple’s ATT policy has had a significant impact on Meta’s revenue.
- Myth 5: Meta’s Spending is a Waste – Meta’s capital expenditures are directly focused on the challenges posed by TikTok and ATT, and should pay off in the long run.
- Maybe True: The Metaverse is a Waste of Time and Money – While the Metaverse may be a bad business for Meta, its costs are relatively small compared to the company’s overall spending.
Click HERE for original. Published October 31, 2022
