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- Tech Giants Are Sliding into a Correction: Meta
Tech Giants Are Sliding into a Correction: Meta
Meta Group, the parent company of Facebook, has suffered badly recently as its stocks are trading 75% off their peak values. Despite such a big discount buying Meta stocks could be a very risky venture as expenses continue to rise.
The number of employees in the company rose by 28% to 87 314 during the last year. It is likely management will not do any more hiring any time soon but nevertheless spending is expected to rise to $94-99 billion in 2023 from the forecasted $85-87 billion in 2022.
Mark Zuckerberg, the founder and CEO of Meta, said spending on Metaverse would rise dramatically. Reality labs, which are responsible for its development, have posted $3.7 billion of spending in Q3 2022, or $2/5 billion more than in the same period of 2021, while revenues are at the same level. Some hopes are pinned on the virtual reality devices of Oculus but this segment is very unstable and highly dependent on new equipment deliveries.
META enthusiasts hope the company will manage to increase revenues to $124 billion in 2023 to compensate Metaverse losses and to push earnings per share to $11 vs $9.2 expected in 2022. Brad Gerstner, a head of Altimeter Capital, one of the major Meta shareholders, has expressed the opinion that Metaverse should cut spending to $5 billion a year while reducing financing Reality Labs staff by 20%.
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