User growth paves way for a higher stock value with Meta Platforms Inc. (FB)

In the first quarter, FB's major social network gained more users than expected, perhaps putting to rest fears that the corporation is losing steam as a new generation flocked to younger sites like TikTok.
 
CENTRAL, Hong Kong - May 11, 2022 - PRLog -- In late trading, shares of Facebook's parent firm Meta Platforms Inc. soared more than 19% after the company announced 1.96 billion daily users for its flagship platform, reversing a trend that began in the December quarter. Analysts predicted a total of $1.94 billion. Revenue increased 6.6% to $27.9 billion over the year and would have been greater if not for the Ukraine conflict, according to the business. Investors grew increasingly concerned that Meta's core business and earnings engine, advertising in its social media feeds was losing steam and the stock had lost over 50% this year.

Those fears appear to have been allayed at least for now, considering FB's recent addition of 31 million new daily active users. Many of Meta's problems still exist. Mark Zuckerberg, Facebook's CEO, has admitted that TikTok, a video sharing app owned by China's ByteDance Ltd., is a significant competitor for young user's attention. At the same time, revisions to Apple Inc.'s iPhone data-collection laws have hampered Meta's ability to deliver customized adverts to its customers. Meta executives predicted last quarter that the privacy restrictions will lower the company's sales by $10 billion by 2022. Advertisers have also been spending less owing to supply chain concerns, inflation and the continuing conflict in Ukraine, according to Meta executives.

A sustained downturn would make it more difficult for FB to justify Zuckerberg's costly, virtual-reality-fuelled metaverse vision, a business that won't earn money for years, if even at all.

On a conference call with analysts on Wednesday, Zuckerberg repeated that Meta's Reality Labs section, which is developing AR and VR technologies, will not contribute significantly to the company's business for several years. Meanwhile, the firm has announced that it would invest billions of dollars and hire thousands of people to turn the platform, which Zuckerberg sees as the next major computing change, into a completely immersive digital world where users can work, buy and play games while interacting online.

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