For months before its devastating quarterly report, Meta Platforms (META) held the $160 price level.
This month, META stock traded at $140 before plunging to a mere $99.20 by Oct. 28, 2022. Virtual
reality is not the reality shareholders want.
Metaverse, or a form of VR, continues to burn billions of dollars in investor money. The slow growth on
core social sites like Instagram, WhatsApp, and Facebook will break the business. Advertisers who are
already cutting spending amid an economic downturn may leave Facebook’s platform.
META stock is a deal today. The price-to-earnings of 8.22 times will attract value investors who missed
out on the stock’s rise to a $353.83 high in the last year.
Dud Stock
P/E is a meaningless multiple for buy-and-hold investors. It only measures the stock’s discount today.
The cash burn from the metaverse expenditure will continue as revenue falls every quarter.
Meta reported single-digit percentage growth on all user activity metrics. But the average price per ad fell
by 18% Y/Y. The firm spent $2 billion on its office property. Furthermore, spending in 2022 is in the
range of $85 to $87 billion.
Trade META stock for a rebound but consider investing for growth elsewhere.
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