US Stocks

Meta: The building of a new brand and virtual world

Meta has shifted itself towards a more metaverse-focussed ecosystem.

Meta (NASDAQ: FB), which was rebranded from Facebook, has changed the traditional way that investors have looked at its business. Instead of being known as just a social media company with an umbrella of apps, Meta has shifted itself towards a more metaverse-focussed ecosystem.

The company now wants to focus on virtual and augmented reality segments over the next few years to build the foundation for what they call the Metaverse. The rebranding was necessary for investors to take Mark Zuckerburg’s vision of the future seriously, as everyone previously turned away at the thought of Facebook being anything more than a social media company.

Meta recently reported third-quarter results which made the stock tumble at first but began to bounce back a few days after following the announcement of rebranding and a new company direction.

Quarterly Results

In the third quarter of this year, Meta reported revenue of $29.01 billion and earnings per share of $3.22.

Revenue fell short of the $29.45 billion expected but was quickly forgiven as earnings per share beat the analyst estimates of $3.17.

Despite Meta’s slight disappointment on revenue by analysts because of Apple changing the policies that affect advertisements, revenue still grew an astonishing 35% year-over-year.

Family monthly active people (MAP) also grew 12% year-over-year, totaling 3.58 billion people using the ecosystem of products that include Facebook, Instagram, Whatsapp, Messenger, and more.

However, as mentioned, the virtual reality segment has begun to be focused on more with the subsidiaries of Oculus under the Facebook Reality Labs umbrella. We are just witnessing the beginning of what Meta has plans for in the future.

The Metaverse

Digital environments are becoming more prominent in today’s world and in the years to come because of the advancement and massive amounts of capital contributed to developing these digital worlds.

The metaverse is the digital realm where individuals can interact and go about their daily lives in a virtual environment. This could mean everything from going to work, exercise, or gaming sessions with friends.

Meta is building the foundation for the metaverse so that individuals and organizations can build a flowing ecosystem of digital services that function on top of it all. Video games, digital products, and services will allow an alternate source of revenue and potential earnings for Meta, which could lead to a much higher share price if the investments in virtual and augmented reality succeed.

Final Thoughts

The rebranding to Meta was a move towards a new direction. This direction will allow a more optimised approach to the social and virtual platforms Meta is building and improving upon.

Quarterly results were impressive, even despite the analyst revenue miss, because of growing earnings, monthly active people on digital platforms, and future investments in the metaverse.

Overall, I think Meta’s business is moving in the right direction as there is potential for far more avenues of growth than previously thought by many investors. Let’s hope this massive new shift and investment in the metaverse plays off because if not, it could affect investor confidence moving forward.

Also See:

Not Investment Advice Indie Investor is for general information use only. It must not be relied upon by readers when making (or not making) their investment decisions. If in doubt you should seek advice from a professional financial adviser.

Join the conversation