Meta shares closed at 5% on Thursday, one day after the company's second-quarter earnings. The results were disappointing. Meta's revenue dropped almost 1% compared to a year ago, and the shares have lost approximately half of their value since 2022. Meta also released a disappointing third quarter forecast. CEO Mark Zuckerberg stated on a conference call with analysts that the company would reduce its headcount to prepare for the economic slowdown. "This is a period that requires more intensity and I expect we will get more done using fewer resources," Zuckerberg said. He said that the "economic downturn" will have a wide impact on digital advertising, which has been already affected by Apple's privacy policies. Meta stated in February that Apple's App transparency feature would result in an annual $10 billion revenue increase. Reels has seen Zuckerberg invest in short videos, which generated $1 billion annually in annualized revenue. The product does not generate as much money as Instagram Stories or the main news feed. UBS' Lloyd Walmsley stated this in a note to investors. We believe investors should hear a clear and tangible improvement in the time it takes to feel comfortable, given the number of product changes that are underway. JMP analysts are positive about Reels' future. "We expect growth to rebound from its current levels while the company's cost structure is more disciplined." They wrote in a Thursday note. Meta has made progress with Reels, and AI has improved recommendations across content. Canaccord Genuity analysts said Wednesday that while concerns about a possible recession may continue to impact the company's digital advertising market, Reels improvements could help it recover.
https://worldforusblog.blogspot.com/2022/08/mark-zuckerberg-declares-that-economic.html
