12 ms·
Zuckerberg Has Burned $500B Turning Facebook to Meta
- smoyer 5y agoThis title is inaccurate ... burning money implies it was spent on something. In this case, it implies that renaming the parent company is responsible for the stock price sinking from its August high. There are quantitative reasons for the stock slide that have nothing to do with this renaming - Facebook lost users for the first time in its history and the announcement that ATT would cost at least $10Bn.
- ecoeconomy 5y agoYou're right. Their stock was going to tank eventually because of increasing privacy regulations.
- toomuchtodo 5y agoI hope someone at Apple’s financial team made the suggestion to trade derivatives on Meta to reap the benefits of their actions on Meta stock price.
- prvc 5y agoIs that legal?
- danielvaughn 5y agoThis is an interesting question. I'm not an expert but it doesn't sound like it would be illegal.
- toomuchtodo 5y agoNot legal advice: Apple made its intentions public. It was the market that mispriced the impact.
- detaro 5y agoApple likely has access to non-public statistics actually showing the impact.
- toomuchtodo 5y agoAre they obligated to not trade on their own research and information? And it’s not Apple stock, it’s Meta’s. Great topic for a Matt Levine Money Stuff segment on his laws of insider trading series. https://github.com/0xNF/lawsofinsidertrading.com https://github.com/0xNF/lawsofinsidertrading.com
- detaro 5y agoFair point, it's a good question if they have an obligation to not use the customer information they gather or not.
- joezydeco 5y agoATT was public knowledge for months before the Meta earnings report.
- Nextgrid 5y agoThe real problem is that the business relies on abusing their users - an obvious conflict of interest. Over time, either the users will evolve to make the abuse less effective (equivalent of "banner blindness" of early web advertising), use technical countermeasures (ad-blocking, alternative clients, etc) or use their political power to vote for regulations that will make outlaw said abuse. A mix of all of these is currently happening. The only areas where this kind of adversarial relationship will work is if the adversary has no choice - such as military/defense or law enforcement for example (military enemies can't vote, suspected & convicted criminals can but the feedback loop is so long that it's not going to have effects any time soon). But if the adversary has a free choice, over time they will exercise that choice which will reduce (and eventually eliminate) the profitability of abusing them. I don't see this - or any other business built primarily on advertising and "growth & engagement" - as a winning long-term strategy.
- quickthrowman 5y ago> The real problem is that the business relies on abusing their users - an obvious conflict of interest. This has been my thesis re: FB for a long time now. Using fear, hate, sex, etc to manipulate higher engagement from users isn’t sustainable. It’s abusive and eventually people will move on.
- ejb999 5y ago>>and the announcement that ATT would cost at least $10Bn. What?
- ct0 5y agoI had to google it, but the first result was Apple App Tracking. NOT you know, the massive telcom.
- tchalla 5y agoIt’s sad that we have to search online or carry a pocket thesaurus to communicate simple things.
- Wiseacre 5y agoI think it's more one user's attempt at standardizing Apple's acronyms.
- ejb999 5y agoAh, thanks, didn't see the connection with AT&T - that makes more sense.
- smoyer 5y agoSorry about that ... definitely NOT AT&T (Lily has until recently been a huge iPhone fan ... now she's "giving away" Samsung Galaxy S22 phones).
- HWR_14 5y agoI don't know what ATT was intended to stand for, but Zuch claimed Apples privacy rules would cost them 10 billion a year.
- cnasc 5y agoApp Tracking Transparency
- daveaiello 5y agoThe media seems to conflate the market value of a company's shares with the size of the business on the way up and the expenditures of the business on the way down. A public company's market value is simply its current share price times the number of outstanding shares, see https://www.investopedia.com/terms/m/marketvalue.asp https://www.investopedia.com/terms/m/marketvalue.asp.
- lotsofpulp 5y agoOr people in the business of selling clicks (or ads, offline and online) intentionally choose to use various metrics in the wrong ways. Using fluctuations in market cap is a tried and true method of churning out nonsense “content”. I assume there are simple algorithms that basically write the whole article based on the market cap change in last day, week, month, year, whatever the article’s publisher wants.
- themodelplumber 5y agoThere's also been a considerable sector rotation & general tech selloff factor which is easily overlooked when fingers point toward Meta internals.
- quickthrowman 5y agoIf FB declines 7-8% more, it will have halved its market cap in 6 months, its a bit more than just a sector rotation regarding FB shares. AAPL is 10% off it’s ATH, GOOG about 15% off it’s ATH, MSFT is 20% off it’s ATH. FB is doing far worse than other big tech.
- themodelplumber 5y agoIt's also younger and a very tempting target for growth-oriented technical traders looking for volatility to leverage. The story is far from over...
- the-dude 5y agoThe renaming on the other hand has everything to do with the stock slide.
- theknocker 5y ago
- arch-ninja 5y agoThe quantitative reasons alone would have been responsible for a small slouch, but everyone would think "Oh it's Facebook they'll get back in the game soon, better buy now". The renaming leaks information that leadership is scared and desperate, which makes those quantitative reasons more fatal because there isn't a (reasonable) recovery plan.
- dylan604 5y agoWhat makes FB=>Meta "leaks information that leadership is scared" while Google=>Alphabet did not?
- arch-ninja 5y agoHmm hadn't thought of that. Did google have the same quantitative issues when they changes names or did that come a few years after? It could just be they timed their jump well.
- dylan604 5y agoMost corp name changes are meant to hide stink from something the company did under the previous name. MCI=>Worldcom, Comcast=>Spectrum, etc. Google is one of the most recognizable companies on the planet, yet made the parent company some ridiculous name. To me, that reeked of trying to protect the other properties from the stink of privacy invasion.
- dmarchand90 5y agoI'm convinced the name Alphabet was chosen to mess with Amazon. Bezos has said he choose the name, in part, to have it very early Alphabetically.
- shakow 5y agoThat FB renamed to Meta in a bad conjecture while it was hemmoraeging users, whereas as the Alphabet renaming looked like a mere organizational refactoring in a constant growth context.
- civilized 5y agoDoes anyone think NY Magazine actually gives a shit about Meta's market cap, except as an excuse to crow when it goes down? No doubt this article rubs shoulders with others that say GDP and stock prices don't mean anything, our societal obsession with them is absurd, and we should measure Gross Happiness Product instead.
- m348e912 5y ago>>Does anyone think NY Magazine actually gives a shit about Meta's market cap They absolutely do not, but it's an attention-grabbing headline. The financial media have a stupid obsession with trying to provide reasoning for stock gains and drops. They're definitely not always right, and it's annoying.
- jzellis 5y agoAnd all so people can buy expensive hardware to allow them to buy imaginary bling with fake money in Anna Delvey's Minecraft server. :-D
- PaulHoule 5y agoIf you think TikTok is less toxic you haven’t seen TikTok or TikTok reaction videos.
- civilized 5y agoAn author must add words to fill out a word count.
- johndfsgdgdfg 5y agoLot of it is about what kind of toxicity being discussed. FB toxicity is mostly associated with the right wing, so it has to be the worst thing on the face of the earth. OTOH I assume (I've never used) TikTok toxicity is mostly from Millennials and Gen Z, who tend to be on the other side of the political spectrum, so it's less toxic. The very same reason you'll never hear about toxicity on Twitter and how much harm it is causing to society. Because Twitter toxicity is the right type of toxicity a lot of journalists and intellectuals love.
- deleted 5y ago[deleted]
- syspec 5y agoPretty sure we hear about twitters toxicity every 5 minutes
- PaulHoule 5y agoI think also TikTok is newer. In the last two months I noticed TikTok reaction videos become a major genre on YouTube. In particular, TikTok has become famous for teen and 20-something girls making fools of themselves and I think it’s taken a while for the situation to develop, a while for people to recognize it, and that recognition facing the headwind that anything girls do is seen through the lens of ‘female empowerment’.
- verse 5y agoCame here to say this. Here's the quote for anyone else: > Facebook’s user base has started to shrink after revelations by whistleblowers and leaks that showed how harmful social media could be to teen users, who are flocking to less toxic competitors like TikTok anyway.
- pyrrhotech 5y agoThough management's questionable shift in focus to the Metaverse over its core apps and spending $10B+ annually on it is certainly largely responsible for the drop, it's also clear the the competition of its core apps is fiercer than ever. Unlike a search engine (GOOG) or ecommerce site (AMZN) that have more evergreen business models, every new generation wants to use a different social media platform than its parents which makes FB's business model inherently more risky and difficult to maintain long term, which is large part of the reason that even before this dubious shift, the market had assigned FB the lowest P/E ratio out of all big tech.
- fbrncci 5y agoHopefully all that cash advances VR/AR in general.
- dwighttk 5y agoNo cash was spent in the making of that headline.
- sharken 5y agoExcept I don't want any XR device sold by Facebook/Meta, but yeah hopefully all XR devices will see some benefit. Although big corporations are not exactly known for their altruistic nature, see https://news.ycombinator.com/item?id=30381990 https://news.ycombinator.com/item?id=30381990 for a recent example.
- lettergram 5y agoFacebook has been increasingly stepping into politics around the globe. In response, they are banning, blocking, etc people and people are leaving the platform. privacy concerns have always been there, but now that actions are being taken it’s obvious actions need to be taken. This “awakening” to the risks of Facebook are leading to lawsuits, new laws, etc which are also decreasing potential revenue (in addition to customers leaving).
- sytelus 5y agoI don’t understand why Facebook isn’t focusing on building more peer-to-peer services. For example, professional profiles, job posting, selling used goods, dating profiles, professional services such as nannies, Children's extracurriculars and so on. There is so much to do! I know they did started marketplace, local business listings and peer payments but it looked like very half hearted and badly designed. In theory, they can be dominant in all of these markets which might significantly reduce reliance on ads. I just don’t know why are they so content being just a status posting website.
- harryf 5y agoYou’re right. But let’s be happy it isn’t. Better that stays fragmented across the globe
- deleted 5y ago[deleted]
- Forge36 5y agoThey are already all of these things? However it's also all "Facebook" They never named their things and it become a ubiquitous blob (I swear they had a dating site but I looked and couldn't find it) Their only UI is hidden behind the status landing page. They could have made sperate websites with branding "by Facebook" redirected users to those new sites from the main page/menu. Instead it's completely. Monolayer/single stack. Not to say "this is wrong" (clearly it made many people lots of money up to this point, now those returns appear to be slowing) The landing page is full of things to look at, but hard to "find the thing I want to do". In this sense splitting the main app and chat made a lot of sense (primary entry point is app launcher on the phone). What it really needed was a way to organize the landing page around product listings. Ie: a second desktop. (This could already happen on users phones, though I suspect most people weren't based on what I've observed on family and friends)
- sytelus 5y agoThis is likely the biggest strategic mistake they did. Product specific sub-websites such as maps.google.com or office.microsoft.com are a must to expose diverse functionality properly. They tried to shove everything into same status-post website. I can imagine dating.facebook.com, market.facebook.com, etc where these subsites are fully customized according to their domain but they take advantage of all the data they have.
- qnsi 5y agoI sold all my index fund and went all in Meta. Zuck is the greatest businessman of our generation and Meta is massively undervalued right now.
- zozbot234 5y agoDude, that's so meta.
- smoyer 5y agoI moved my entire retirement fund into MySpace and when the stock rebounds, I'm going to be living like a Trump!
- Forge36 5y agoYou might already be! (Myspace isn't dead though I don't know their 20 year looks better that s&p average) I didn't realize at&t bought myspace.
- mensetmanusman 5y agoThe title is fake news. FB stock dropped because of TikTok etc., but it was overpriced from its high due to a number of factors related to the pandemic and politics.
- jacknews 5y ago"Facebook’s user base has started to shrink after revelations by whistleblowers and leaks that showed how harmful social media could be to teen users, who are flocking to less toxic competitors like TikTok anyway. " LOL. The problem with all these 'services' is that they need 'user engagement' to make money. They take different approaches to addict users; triggering outrage in the case of twitter, triggering aspirational yearnings in the case of instagram, voyeurism with tiktok, and so on. They are all toxic because they need to profit from user attention.
- etempleton 5y agoThe name change and shift in focus were almost certainly because they were losing users and revenue and they saw no future growth for Facebook and Facebook’s name has been sufficiently dragged through the mud. In the future you can hear Zuckerberg saying, “all those privacy issues were regrettable issues with Facebook, not Meta.” The hope has to be to create a platform. Sell devices. Take a cut from App Store sales. Some advertising, but not nearly as invasive or core to the business model.