Meta’s share price is on course for the worst day in its history after the tech giant gave a grim update on its performance in the fourth quarter of 2021 — and revealed eye-watering losses in its metaverse division.
But this wasn’t the main thing that is troubling investors. Financials relating to Reality Labs — the division responsible for pursuing Mark Zuckerberg’s metaverse dream — have been disclosed for the first time, and they make for very uncomfortable reading.
To make matters worse, Meta’s chief financial officer David Wehner has warned that he expects operating losses will “increase meaningfully” in 2022. All of this means that there’s little sign of the company’s push into the metaverse becoming a cash cow, at least for now.
All of this comes as Meta — which owns Facebook, Instagram and WhatsApp — battles with rival social networks for eyeballs, and to engage with younger consumers who prefer using TikTok. All of this is having an impact on Meta’s advertising revenue, which represents the lion’s share of profits. Speaking to analysts on an earnings call, Zuckerberg admitted: