🔒 Facebook may have 2 billion users every day, but they don't pay a penny to use the world's largest network. The money comes from digital advertising. And when that faces headwinds, the Facebook business model looks vulnerable and fragile.
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Facebook is screwed
In Decline: On last week's earnings call, Meta, the parent of Facebook, reported its first-ever decline in quarterly revenue. For the first time in over a decade, unprecedented growth from Facebook had come to an end.
- At $28.8 billion, revenue was down 1% from the second quarter of last year.
- Meta missed nearly all of its targets: active users fell short, earnings per share missed, Average Earnings Per User was off.
- The leadership also changed. The Chief Financial Officer moved on and long-time Chief Operating Officer and Zuckerberg's number 2 for the last 14 years, Sheryl Sandberg, has now left the building.
- Meta has plunged from a market cap over $1 trillion in September to $431 billion today. It has lost $647 billion in market value in the 10 month since becoming Meta.
- Bloomberg reports that Meta are looking to tap the bond market to raise funds for the first time ever.
- The outlook for Q3 doesn't look any better.
The Point Is: Facebook is screwed (IMHO).
Here are 4 reasons why I say that;