Facebook shares fall, along with its user numbers

Facebook, now rebranded as "Meta", has reported that the earnings and data obtained during the last few days have a weaker trend than expected. The shares have fallen by more than 20% in recent days, dropping to $246.53 when they were originally trading at $323. Another report prepared by the company indicates that, during the last quarter of 2021, the net profit of the social network has fallen by more than 8%, causing a loss of 10.2 billion dollars for the company. The data coincides with a loss of daily users, the first time in 18 years since the platform was founded that such a decline has been recorded.  

The social network claims that daily users have fallen short of the expectations of analysts working at the company, with 1.929 million reported in the three months to the end of December. Last year it picked up 1.84 billion users at the same time last year, after losing almost 1.93 billion in the previous quarter. Secondly, the brand has managed to maintain monthly active users with a record 2.91 billion in the last quarter of 2021, which, compared to the 2020 figure, is a significant improvement.  

Revenue in the last quarter grew by a further 20 per cent, with $33.6 billion raised, exceeding forecast estimates. Total 2021 profit has also increased by around 35% to more than $39.4bn. Sales have also been buoyed, rising 37 per cent to a profit of nearly $120bn.  

"We had a solid quarter as people turned to our products to stay connected and businesses continued to use our services to grow," said Facebook founder and CEO Mark Zuckerberg. 

Earnings per share sold fell 5% year-on-year to $3.6, when it was expected to grow to $3.8. This is because ads on all the apps that make up Meta - Instagram, Messenger, WhatsApp and so on - increased by 13% and the price of each ad grew by 6%. For the whole of 2021, the data points to a 10% increase. 

On the other hand, in the fourth quarter the firm's ad sales contributed more than 96%, a 20% boom, from which it collected more than $32bn from September to December. Added to this is revenue from other channels, up 16.6 per cent. 

"I am encouraged by the progress we made last year in a number of important growth areas such as reels, commerce and virtual reality, and so on. We will continue to invest in these and other key priorities in 2022 as we work to build the metaverse," Zuckerberg says. 

While this may sound like good news and the social network's analytics experts are happy with the results, the company's aspirations and estimates were much higher, which is a huge downturn for the app. In addition, the latest reports assure that the trend will remain the same for the first quarter of 2022 and growth is likely to be affected.  

This is mainly due to Apple's new update that will make it more difficult for Facebook to recommend ads based on the user, who in turn will be able to choose whether or not to participate in the tracking that some companies use to collect data for advertising purposes. 

"Meta expects growth to be negatively impacted by several factors. First, we will review a period when Apple's iOS changes were not in effect and anticipate modest increases in ad targeting and headwinds from measuring regulatory and platform changes. Second, we will overcome a period of strong demand in the prior year and are hearing from advertisers that macroeconomic challenges such as cost inflation and supply chain disruptions are impacting advertisers' budgets," says David Wehner, CFO of the US company.