7 ms·

Poor performance? Meta is doing great and just had one year of not insane growth. My take on why they have to fire people is that they hired way too many in 202

by jeltz 4y ago

Poor performance? Meta is doing great and just had one year of not insane growth. My take on why they have to fire people is that they hired way too many in 2020 and 2021. https://www.statista.com/statistics/277229/facebooks-annual-revenue-and-net-income/ https://www.statista.com/statistics/277229/facebooks-annual-...

ramraj07 4y ago
And from what I remember, many of the retention models also got screwed up (people weren’t quitting as often as before).
- troupe 4y ago
  Was this because when people were allowed to work remote, fewer people quit to move to a different part of the country?
lotsofpulp 4y ago
Poor performance is relative to what their peers (Alphabet/Apple/Amazon/Microsoft) were accomplishing for many years in the 2010s. The market has separated these 5 pretty clearly now, with Meta trailing by quite a bit, Alphabet and Amazon in the middle, and Microsoft and Apple with a decent lead.
- Closi 4y ago
  Meta is in the advertising business - why would we say they are they trailing Apple, Amazon and Microsoft? I don't really understand why we are comparing a company who develops social media applications and generates advertising revenue against Apple who generates most of it's revenue from selling Hardware, or Microsoft who generates most of it's revenue from licencing software. If we are saying that Meta are trailing Apple, we might as well say that Microsoft are trailing Saudi Aramco.
  - lotsofpulp 4y ago
    The market is not comparing their potentials now, but the market used to feel their potentials were similar in 2010s. Sorry for the terrible graph, it’s the quickest market cap with all of them except Microsoft on it that I found. http://www.innovationkm.com/wp-content/uploads/2019/05/image004.png http://www.innovationkm.com/wp-content/uploads/2019/05/image... http://www.innovationkm.com/the-market-cap-of-faang-changes-in-the-past-days/ http://www.innovationkm.com/the-market-cap-of-faang-changes-... Another way to think of it is in the 2010s, a potential employee may have ranked a job at any of those companies as having similar security, but there is probably a different feeling about that now.
    - Closi 4y ago
      They aren't really in the same market though - so it's comparing apples and oranges. I get comparing Meta against Google, but why would we compare Meta against Apple? They are fundamentally different businesses.
      - lotsofpulp 4y ago
        The market compared their potential during the 2010s, because everyone was growing by leaps and bounds and the sky was the limit. There is clearly no reason to do that now.
        Closi 4y ago
        Plot the graph again but instead of comparing them to Apple and Netflix try comparing them to Johnson & Johnson and Porche.
        Closi 4y ago
        As a follow on point to my other reply comment on review, the comparable stock on that list is Google - and the graph probably shows that the market actually underestimated Meta's 'potential' compared to Google. 2010 Meta 'Potential' vs 2010 Google 'Potential' - c$50bn vs c$200bn 2022 Meta 'Potential' vs 2022 Google 'Potential' - c580bn vs c$800bn Meta grew >10x across the period, while Google grew c4x I don't personally buy that Market Cap = Potential, but you would be twice as rich if you invested in Meta according to that graph than if you invested in Google, and you would have also done better investing in Meta across that period than Apple according to the graph you sent across.
dageshi 4y ago
Tech companies are valued by how they dominate particular sectors/niches and the potential growth of that sector/niche. Facebook doesn't dominate social any more like it once did. It did so with Facebook itself then with instagram but TikTok is grabbing the current generation of new users. It can't grow like it once did and usage of its existing services will gradually decline. It's betting that the metaverse is the next social medium after TikTok's short form video. Personally I doubt that but that's the bet they're making.
- rchaud 4y ago
  Meta dominates the display ad market though, that is all they care about. Once TikTok is banned in America, they can grow it further.
  - deelowe 4y ago
    TikTok isn't getting banned, don't be silly.
    - jq-r 4y ago
      Is it silly? It's already being banned from US and European government devices. It is just one more sentence away from being banned for general population in those huge regions.
      - CameronNemo 4y ago
        There is big chasm between banning an app from fleet devices and banning both an app and a website in an entire country. Especially one that is so enormously popular.
        Hoyadonis 4y ago
        I cannot recall the last time I've seen such a bipartisan push for something so monumental. Just within the past week, Senators Josh Hawley (R-MO) and Mark Warner (D-VA) have been saying virtually the same thing: TikTok is an unprecedented national security threat.
solaarphunk 4y ago
Facebook’s ads business has been destroyed by Apple with the introduction of ATT. It’s pretty clear this is a permanent shift downward in revenue for them, unless advertisers like them are able to improve ads attribution.
- ashwagary 4y ago
  Don't you think Bing's search revamp will also eat into the FB ad business? IMO, there is enough contextual info supplied by users during queries to better target users with injected ads than competitors.
mrtksn 4y ago
IMHO these hirings and firings are not about the present but about the future. Sure, Meta did great but Nokia also did great for a while after iPhone was introduced. What is the latest cool Meta product which promises a bright future for the company? Well, llama is cool but it's not product and today's greatest social media sensation is TikTok. I'm sure meta does have some great tech, in fact some of the work they did on VR with all these tens of billions of dollars is groundbreaking but that also failed as a product. Why would they keep the workforce configuration the same if their current state is probably not what they want to be tomorrow?
- hattmall 4y ago
  I get the feeling TikTok has played themselves. Their format is super addictive, and it works, but the problem is that with something super addictive people lose interest sooner. It's not an actual drug so you can't just keep upping the dosage. I don't have the internal metrics and I'm sure they are still making gains, but I think their wave is going to be much smaller than Facebooks. It's still very popular of course but just judging by the number of times phones have been shoved in my face to watch a tiktok at social events recently vs a year ago I have to feel their is some level of decline. I also notice that even the younger crowd isn't using it as much. It seems to me that right now the most popular thing is sharing videos, both 3rd party and original within various group chats. I think there is social media platform overload, and the best way to keep in touch with people that actually matter to you and be sure they see your content is having group chats where you share things and then talk about it. Just my anecdotal observation, I'm probably wrong. It seems similar to the resurgence of piracy now that there are 50+ different streaming apps.
  - mrtksn 4y ago
    I don’t think TikTok is any more addictive than the rest. If anything, TikTok doesn’t make me feel missing out if I don’t constantly check the App. I’m aware of the Chinese thing and how it makes some people feel but IMHO TikTok is healthy in in comparison with the Instagram or Reddit for example. You still can spend hours once in though. After years of stagnation with Meta, TikTok is a step forward.
bumby 4y ago
The metric you choose matters. If you would have chosen EPS it tells a very different story, especially for investors. Investors will tend to tolerate other faltering metrics for high revenue growth in startups, but that’s not Meta.
- jeltz 4y ago
  But EPS is doing great for Meta so I have no idea what you are talking about. Their only issue I can see for EPS is that they hired to many in 2020 and 2021, just as I said.
  - bumby 4y ago
    Tech is still valued as growth stocks compared to other sectors. If you look at the EPS, its trending down and growth is negative.[1] That's not "doing great" for what most investors expect out of a relatively mature tech stock that doesn’t pay a dividend. In other words, why would I pay growth-stock valuation for something that isn't growing its earnings? (obviously, the analysis is more complicated than this, but you can see why investors may not think things are going gang-busters over at Meta) [1] https://www.macrotrends.net/stocks/charts/META/meta-platforms/eps-earnings-per-share-diluted https://www.macrotrends.net/stocks/charts/META/meta-platform...
rnmkr 4y ago
[dead]
ashwagary 4y ago
>Poor performance? Meta is doing great and just had one year of not insane growth. Public sentiment is terrible and if that's a reliable leading indicator, the company will be in trouble if it doesnt continually diversify into products that distance themselves from the core brand.
- acedTrex 4y ago
  I mean instagram and whatsapp are wildly popular
  - ashwagary 4y ago
    They are popular but anecdotally, if the general public is anything like me, they would be more likely to use those products if they werent owned by FB.
    - acedTrex 4y ago
      The general public does not really care one way or another about facebook the company
    - Tangurena2 4y ago
      The conversations that I've been hearing point to the simplest way to kill TikTok: force them to sell to Facebook. As much as people dislike the spyware present in TikTok, they dislike FB's spying even more.
SkyPuncher 4y ago
> Meta is doing great and just had one year of not insane growth. This completely overlooks the changes that happened in that one year of not insane growth. Apple cut Meta's legs off and Meta has no indication on how they're going to regrow them. The Metaverse is flopping, FB is seen as a place for hate, youths don't have accounts, etc, etc, etc. Facebook is not the future of social media and Meta has not come up with a viable alternative.
kqr2 4y ago
It probably doesn't bode well that Cramer says Meta is ‘rapidly becoming my favorite stock’ : https://www.cnbc.com/2023/03/14/club-meeting-recap-cramer-says-meta-is-becoming-my-favorite-stock-.html https://www.cnbc.com/2023/03/14/club-meeting-recap-cramer-sa...

by jeltz 4y ago

ramraj07 4y ago

And from what I remember, many of the retention models also got screwed up (people weren’t quitting as often as before).

troupe 4y ago
Was this because when people were allowed to work remote, fewer people quit to move to a different part of the country?

lotsofpulp 4y ago

Poor performance is relative to what their peers (Alphabet/Apple/Amazon/Microsoft) were accomplishing for many years in the 2010s. The market has separated these 5 pretty clearly now, with Meta trailing by quite a bit, Alphabet and Amazon in the middle, and Microsoft and Apple with a decent lead.

Closi 4y ago
Meta is in the advertising business - why would we say they are they trailing Apple, Amazon and Microsoft? I don't really understand why we are comparing a company who develops social media applications and generates advertising revenue against Apple who generates most of it's revenue from selling Hardware, or Microsoft who generates most of it's revenue from licencing software. If we are saying that Meta are trailing Apple, we might as well say that Microsoft are trailing Saudi Aramco.
- lotsofpulp 4y ago
  The market is not comparing their potentials now, but the market used to feel their potentials were similar in 2010s. Sorry for the terrible graph, it’s the quickest market cap with all of them except Microsoft on it that I found. http://www.innovationkm.com/wp-content/uploads/2019/05/image004.png http://www.innovationkm.com/wp-content/uploads/2019/05/image... http://www.innovationkm.com/the-market-cap-of-faang-changes-in-the-past-days/ http://www.innovationkm.com/the-market-cap-of-faang-changes-... Another way to think of it is in the 2010s, a potential employee may have ranked a job at any of those companies as having similar security, but there is probably a different feeling about that now.
  - Closi 4y ago
    They aren't really in the same market though - so it's comparing apples and oranges. I get comparing Meta against Google, but why would we compare Meta against Apple? They are fundamentally different businesses.
    - lotsofpulp 4y ago
      The market compared their potential during the 2010s, because everyone was growing by leaps and bounds and the sky was the limit. There is clearly no reason to do that now.
      - Closi 4y ago
        Plot the graph again but instead of comparing them to Apple and Netflix try comparing them to Johnson & Johnson and Porche.
      - Closi 4y ago
        As a follow on point to my other reply comment on review, the comparable stock on that list is Google - and the graph probably shows that the market actually underestimated Meta's 'potential' compared to Google. 2010 Meta 'Potential' vs 2010 Google 'Potential' - c$50bn vs c$200bn 2022 Meta 'Potential' vs 2022 Google 'Potential' - c580bn vs c$800bn Meta grew >10x across the period, while Google grew c4x I don't personally buy that Market Cap = Potential, but you would be twice as rich if you invested in Meta according to that graph than if you invested in Google, and you would have also done better investing in Meta across that period than Apple according to the graph you sent across.

dageshi 4y ago

Tech companies are valued by how they dominate particular sectors/niches and the potential growth of that sector/niche. Facebook doesn't dominate social any more like it once did. It did so with Facebook itself then with instagram but TikTok is grabbing the current generation of new users. It can't grow like it once did and usage of its existing services will gradually decline. It's betting that the metaverse is the next social medium after TikTok's short form video. Personally I doubt that but that's the bet they're making.

rchaud 4y ago
Meta dominates the display ad market though, that is all they care about. Once TikTok is banned in America, they can grow it further.
- deelowe 4y ago
  TikTok isn't getting banned, don't be silly.
  - jq-r 4y ago
    Is it silly? It's already being banned from US and European government devices. It is just one more sentence away from being banned for general population in those huge regions.
    - CameronNemo 4y ago
      There is big chasm between banning an app from fleet devices and banning both an app and a website in an entire country. Especially one that is so enormously popular.
      - Hoyadonis 4y ago
        I cannot recall the last time I've seen such a bipartisan push for something so monumental. Just within the past week, Senators Josh Hawley (R-MO) and Mark Warner (D-VA) have been saying virtually the same thing: TikTok is an unprecedented national security threat.

solaarphunk 4y ago

Facebook’s ads business has been destroyed by Apple with the introduction of ATT. It’s pretty clear this is a permanent shift downward in revenue for them, unless advertisers like them are able to improve ads attribution.

ashwagary 4y ago
Don't you think Bing's search revamp will also eat into the FB ad business? IMO, there is enough contextual info supplied by users during queries to better target users with injected ads than competitors.

mrtksn 4y ago

IMHO these hirings and firings are not about the present but about the future. Sure, Meta did great but Nokia also did great for a while after iPhone was introduced. What is the latest cool Meta product which promises a bright future for the company? Well, llama is cool but it's not product and today's greatest social media sensation is TikTok. I'm sure meta does have some great tech, in fact some of the work they did on VR with all these tens of billions of dollars is groundbreaking but that also failed as a product. Why would they keep the workforce configuration the same if their current state is probably not what they want to be tomorrow?

hattmall 4y ago
I get the feeling TikTok has played themselves. Their format is super addictive, and it works, but the problem is that with something super addictive people lose interest sooner. It's not an actual drug so you can't just keep upping the dosage. I don't have the internal metrics and I'm sure they are still making gains, but I think their wave is going to be much smaller than Facebooks. It's still very popular of course but just judging by the number of times phones have been shoved in my face to watch a tiktok at social events recently vs a year ago I have to feel their is some level of decline. I also notice that even the younger crowd isn't using it as much. It seems to me that right now the most popular thing is sharing videos, both 3rd party and original within various group chats. I think there is social media platform overload, and the best way to keep in touch with people that actually matter to you and be sure they see your content is having group chats where you share things and then talk about it. Just my anecdotal observation, I'm probably wrong. It seems similar to the resurgence of piracy now that there are 50+ different streaming apps.
- mrtksn 4y ago
  I don’t think TikTok is any more addictive than the rest. If anything, TikTok doesn’t make me feel missing out if I don’t constantly check the App. I’m aware of the Chinese thing and how it makes some people feel but IMHO TikTok is healthy in in comparison with the Instagram or Reddit for example. You still can spend hours once in though. After years of stagnation with Meta, TikTok is a step forward.

bumby 4y ago

The metric you choose matters. If you would have chosen EPS it tells a very different story, especially for investors. Investors will tend to tolerate other faltering metrics for high revenue growth in startups, but that’s not Meta.

jeltz 4y ago
But EPS is doing great for Meta so I have no idea what you are talking about. Their only issue I can see for EPS is that they hired to many in 2020 and 2021, just as I said.
- bumby 4y ago
  Tech is still valued as growth stocks compared to other sectors. If you look at the EPS, its trending down and growth is negative.[1] That's not "doing great" for what most investors expect out of a relatively mature tech stock that doesn’t pay a dividend. In other words, why would I pay growth-stock valuation for something that isn't growing its earnings? (obviously, the analysis is more complicated than this, but you can see why investors may not think things are going gang-busters over at Meta) [1] https://www.macrotrends.net/stocks/charts/META/meta-platforms/eps-earnings-per-share-diluted https://www.macrotrends.net/stocks/charts/META/meta-platform...

rnmkr 4y ago

[dead]

ashwagary 4y ago

>Poor performance? Meta is doing great and just had one year of not insane growth. Public sentiment is terrible and if that's a reliable leading indicator, the company will be in trouble if it doesnt continually diversify into products that distance themselves from the core brand.

acedTrex 4y ago
I mean instagram and whatsapp are wildly popular
- ashwagary 4y ago
  They are popular but anecdotally, if the general public is anything like me, they would be more likely to use those products if they werent owned by FB.
  - acedTrex 4y ago
    The general public does not really care one way or another about facebook the company
  - Tangurena2 4y ago
    The conversations that I've been hearing point to the simplest way to kill TikTok: force them to sell to Facebook. As much as people dislike the spyware present in TikTok, they dislike FB's spying even more.

SkyPuncher 4y ago

> Meta is doing great and just had one year of not insane growth. This completely overlooks the changes that happened in that one year of not insane growth. Apple cut Meta's legs off and Meta has no indication on how they're going to regrow them. The Metaverse is flopping, FB is seen as a place for hate, youths don't have accounts, etc, etc, etc. Facebook is not the future of social media and Meta has not come up with a viable alternative.

kqr2 4y ago

It probably doesn't bode well that Cramer says Meta is ‘rapidly becoming my favorite stock’ : https://www.cnbc.com/2023/03/14/club-meeting-recap-cramer-says-meta-is-becoming-my-favorite-stock-.html https://www.cnbc.com/2023/03/14/club-meeting-recap-cramer-sa...