Meta Suffers Staggering Overnight Plummet as Zuckerberg Doubles Down on ‘Terrifying’ Strategy

Meta stock plunged Thursday in pre-market trading as investors seeking profits are losing patience with the underperforming company.

As of 9:30 a.m Eastern Time, Meta’s stock was at $98.45 per share, down over 31 percent from Wednesday’s close, according to Yahoo Finance.

Investors are grumpy over the ever-increasing costs of Meta’s virtual reality projects that are not paying out a significant return on a mammoth investment.

Reuters quoted analysts it did not name as saying Meta’s investments were “confusing and confounding” and its inability to cut costs “extremely disturbing.”

“The roll out and take up of the group’s virtual reality products leaves a lot to be desired, despite the seemingly never-ending upwards spiral of the research and development budget,” Sophie Lund-Yates, Hargreaves Lansdown’s lead equity analyst, said, according to Business Insider

Meta shareholder Altimeter Capital Management, a technology-focused hedge fund, wants Meta to cut its metaverse investments in half from the current annual level of $10 billion.

Altimeter said such huge investments “in an unknown future is super-sized and terrifying, even by Silicon Valley standards,” according to Reuters.

Meta, the parent company of Facebook, said costs could rise 16 percent next year and that losses at Reality Labs, where metaverse research and development is taking place,  “will grow significantly” next year.

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Reality Labs lost $5.8 billion in the first six months of the year. Its third-quarter losses amounted to $3.67 billion, according to Reuters.

During a conference call, Jefferies analyst Brent Thill told Meta executives, “I think kind of summing up how investors are feeling right now is that there are just too many experimental bets versus proven bets on the core … I think everyone would love to hear why you think this pays off.”

CEO Mark Zuckerberg said he was staying the course.

“It would be a mistake for us to not focus on any of these areas that will be fundamentally important to our future,” he said.

“I know that sometimes when we ship a product … people say: ‘Hey, you’re spending all this money, and you’ve produced this thing,’ and I think that’s not really the right way to think about it.”

“We’re doing leading work that will become … eventually mature products at different cadences in different periods of time over the next five to 10 years,” he said.

Zuckerberg touted a $1,500 virtual and mixed reality headset called Quest Pro and a social metaverse platform where people use avatars to express themselves.

Paolo Pescatore, an analyst at PP Foresight, was not sold.

“The metaverse … feels like … one big gamble given the economic crisis,” he said.

“People are not rushing out of their seats to buy a VR headset or even watch 360-degree videos … The new device still feels like an expensive toy,” he said.

As noted by Business Insider, Meta’s shares were down just over 61 percent for the year, even before Thursday’s erosion.

A slowdown in digital advertising linked to the economic slowdown is impacting all tech platforms. Alphabet, the parent of Google, suffered a fall in its stock price after a Wednesday report indicating a revenue decline from YouTube and Google Network.

This article appeared originally on The Western Journal.