Facebook/Instragram/WhatsApp owner Meta Platforms (META) is hurting right now. Growth has stagnated. Users and advertisers aren’t particularly happy. The company’s push into the metaverse, i.e. virtual/augmented reality, has turned out to be a money pit.
Meta’s Reality Labs division lost a staggering $3.7 billion in the third quarter and has generated red ink totaling $9.4 billion so far this year. And it’s going to get worse!
“We do anticipate that Reality Labs operating losses in 2023 will grow significantly year-over-year,” Meta said in its earnings release.
But if investors are expecting Meta to make any major strategic shifts, they may be deluding themselves. That’s because Meta is CEO Mark Zuckerberg’s company and he is pretty much able to to do whatever he pleases without having to fear Wall Street’s wrath.
Zuckerberg owns a 13.6% stake in Meta, but most of his stock is in the form of Class B shares — which have ten times the voting rights as normal Meta shares. That means Zuckerberg has nearly 57% voting control at the company.
So even though Meta’s stock is now down 70% this year, the only way that the company will change course is if Zuckerberg decides it needs a new strategy or wants to find other seasoned tech and/or media executives to help get the company back on track.
Wall Street simply doesn’t have enough voting power to force Zuck’s hand, virtually or otherwise.
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2022-10-27 16:31:00
