The performance crashed, and the strategic focus changed to "meta-universe priority" and Facebook, whose name was changed to Meta, created the company's largest single-day decline in the past decade.

's performance has plummeted, and its strategic focus has shifted to "meta-universe priority", and its name has been changed to Meta's Facebook, setting the company's largest single-day decline in the past decade.

Wednesday US stocks After the market closed, Facebook released its first quarterly financial report after its name change. The financial report shows that in the fourth quarter of 2021, Meta's revenue increased by 20% year-on-year, with a significant slowdown in growth; the year-on-year decline in earnings per share doubled compared with market expectations, which is the first time that net profit decline has declined since the second quarter of 2019; key user indicators are poor, inferior to expectations; more pessimistic is that the revenue guidance in the first quarter of this year was weak.

was affected by this. Meta's stock price fell 23% after the market on the day, and other social media stocks were also dragged down. Among them, Snap plummeted 16.91% after the market, Pinterest fell 9.27%, and Twitter fell 7.97%. On Thursday, US stocks opened , Meta opened low, with an intraday drop of 27%. As of the closing, the decline was 26.39%. The total market value fell by US$237.1 billion, or approximately RMB 150.8 billion, compared with the previous day's closing.

core advertising business growth slowed down

financial report shows that in Q4 2021, Meta's revenue was US$33.67 billion, slightly higher than analysts' expectations of US$33.4 billion, a year-on-year increase of 20%. Compared with the first three quarters of last year, the revenue growth rate slowed down significantly.

is directly due to the growth of its core advertising business. In Q4 2021, Meta advertising revenue was US$32.639 billion, a year-on-year increase of 20%, which is consistent with the growth rate of total revenue.

And behind this, Meta faces three impacts:

• First, from the perspective of the overall environment, global supply chain disruptions, labor shortages and inflationary pressures have led to a sluggish advertising market in the fourth quarter.
• The second is that the privacy policy changes of platforms such as Apple and Google have had a huge impact on advertisers' revenue.

On April 27, 2021, with the official release of Apple's IOS 14.5, the most powerful new privacy rules in Apple's history began to be implemented. After Apple strongly promotes the new IDFA regulations, if the APP or company wants to stay on the iOS system, it must study its own attribution plan and cooperate with Apple's SKadnetwork for technical docking.

In this regard, Meta Chief Operating Officer Sheryl Sandberg (Sheryl Sandberg ) explained in the performance call, "Apple has brought two challenges to advertisers. One is that the accuracy of our advertising positioning has decreased, which has increased the cost of advertisers; the other is that it has become more difficult to measure the effectiveness of advertising."

"We believe that iOS will have an adverse impact on our business in 2022 as a whole." Meta Chief Financial Officer Dave Wehner further stated at the meeting, "This impact is expected to reach at least US$10 billion, which is a considerable challenge for our business."

• Third, its own key user metrics are poor.

financial report shows that Facebook's daily active users in the fourth quarter were 1.93 billion, a year-on-year increase of 5%, but lower than the market's expected 1.95 billion; monthly active users were 2.91 billion, a year-on-year increase of 4%, lower than the market's expected 2.95 billion. This also means that the company's daily active users' data showed a month-on-month decline for the first time.

Facebook executives pointed out that consumers' behavior towards Facebook's TikTok-like products has changed - that is, people spend more time on Reels videos, and the revenue of the product is far less than that of other core products, and they also face fierce competition from services such as TikTok, which will continue to bring adverse factors.

Meta expects revenue in the first quarter of 2022 to be between $27 billion and $29 billion, a year-on-year increase of 3% to 11%, lower than the market's expectations of $30.25 billion. The company warned that foreign currency exchange rates will also become a resistance to year-on-year growth in revenue this quarter.

Yuan Universe business unit loses more than 10 billion

core advertising business, in addition to the constraints of Zuckerberg's betting on the "meta universe business" is still in a state of burning money.

It is reported that after the name change, Meta's financial reporting method has changed. Since Q4 2021, the financial report structure consists of two parts. One is the "application family", including Facebook, Instagram, Messenger, WhatsApp and other services, and the second is FRL (Reality Labs, Facebook Reality Labs), including hardware, software and content related to AR ( augmented reality ) and VR (virtual reality).In the fourth quarter report of

, Meta disclosed the financial status of the FRL department, which includes the meta-universe strategy for the first time. During the reporting period, it achieved revenue of US$877 million, a year-on-year increase of 22.3% and a month-on-month increase of 57.2%, while operating losses further expanded to US$3.304 billion. Judging from the full-year performance, the department experienced huge net losses in 2019, 2020 and 2021, and the loss amount expanded year by year, to US$4.5 billion, US$6.62 billion and US$10.19 billion, respectively.

is the loss of this department that has dragged down the company's overall profitability. According to the financial report, in Q4 2021, Meta's net profit was US$10.285 billion, significantly weaker than the expected US$10.9 billion, down 8% year-on-year, the first decline in net profit since the second quarter of 2019. The report said that if it weren't for FRL, the company would have made more than $56 billion in profits for the full year last year.

It is worth noting that this is consistent with Zuckerberg's expectations. In July 2021, Zuckerberg mentioned in his vision description of the metaverse, "At least in the next three years, Meta's metaverse business requires long-term capital investment, and the possibility of profit is very small, which will compress Meta's profit margin and put pressure on Meta's cash flow ."

At this performance call, Meta's chief financial officer Dave Wehner predicted that operating losses in 2022 will also "significantly increase."

For this reason, JPMorgan analyst Doug Anmuth downgraded the Meta rating from the previous hyper-matching to neutral. "Meta advertising revenue growth slows sharply, and the transformation toward the metacosmic business is expensive, uncertain, and may last for several years... We adjust our attitude to a wait-and-see state - we believe that the company's stock price will be subject to more pressure or range fluctuations in the coming months."

According to Wall Street News, since Meta released the Meta Declaration of Meta, there have been 224 US companies' financial report calls mentioned the term "meta-universe", while there were only 7 times in 2020, showing how popular the Meta-universe is as the next mainstream concept after the mobile Internet. But Kim Forrest, chief investment officer at Bokeh Capital, warned that Meta is expected to invest heavily in building the Meta Universe, but pioneers cannot guarantee success. Pedro Palandrani, a research analyst at

investment company Global X, also said that the metaverse is a "long-term story". In the short term, investors are more concerned about how Meta controls Apple's privacy changes, e-commerce business breakthroughs, and how to make money through Messenger or short video Reels functions.

MetA shares price plummeted short-term negative for A-share related concept sectors, but some people believe that the long-term development of the meta-universe is still worth looking forward to.

Huatai Securities believes that in the metaverse, high-quality content is still scarce, and content production tools (game engines) and works and IPs for end users have a large market space. On the hardware side, the newly exposed Magic Leap 2 is equipped with a total of 18 sensor cameras. Huatai Securities believes that this trend is expected to continue. In the future, with the upgrade of data volume and interaction methods of metaverse applications, more types of sensors and controllers will be equipped with terminal devices such as headsets and handles to continuously optimize users' immersive experience.

There are more than 90 Yuan Universe concept stocks in the A-share market. From the perspective of institutional attention, Perfect World , Mango Super Media , Zhongkechuangda and other stocks have more than 10 institutions rated it. In terms of market value, the market value of Goertek and iFlytek and are both over 100 billion yuan, while the market value of Lens Technology , Mango Supermodel, Zhongke Chuangda and other stocks are all over 50 billion yuan.

( Titanium Media App editor Liu Mengmeng compiled from Daily Economic News , Tencent News, Securities Star, etc.)