Shares Of Facebook Parent Meta Plunge 23% On Lower Profits

Newly renamed Meta is investing heavily in its futuristic “metaverse” project, but for now, relies on advertising revenue for nearly all its income.

So when it posted sharply higher costs but gave a weak revenue forecast late Wednesday, investors got spooked — and knocked almost $200 billion offthe valuation of the company formerly known as Facebook.

Meta’s shares fell 22.9% to $249.05 in afterhours trading. If the drop holds until the market opens Thursday, the company’s overall value, known as its market capitalization, is on track to drop by a figure greater than the size of the entire Greek economy, based on data from the World Bank.

The metaverse is sort of the internet brought to life, or at least rendered in 3D. Meta CEO Mark Zuckerberg has described it as a “virtual environment” in which you can immerse yourself instead of just staring at a screen. Theoretically, the metaverse would be a place where people can meet, work and play using virtual reality headsets, augmented reality glasses, smartphone apps or other devices.

But building it is not likely to be cheap.

Meta invested more than $10 billion in its Reality Labs segment — which includes its virtual reality headsets and augmented reality technology — in 2021, contributing to the quarter’s profit decline. It expanded its workforce by 23%, ending the year with 71,970 employees, mostly in technical roles.