Facebook owner Meta’s shares sank by 24% amid a wide selloff that suggests investors are none too pleased with CEO Mark Zuckerberg’s metaverse strategy.
The share drop brought Meta’s total market capitalization below $265 billion. It exceeded $1 trillion last year.
Shares fell dramatically on the heels of Meta reporting that Reality Labs, its metaverse division, lost $3.7 billion during the third quarter. The division’s year-to-date losses total $9.4 billion, the company reported on Wednesday.
During an earnings call with analysts, Zuckerberg attempted to assure investors his strategy would pay dividends in the long term.
“Look, I get that a lot of people might disagree with this investment [in the metaverse], but from what I can tell, I think this is going to be a very important thing,” Zuckerberg said on the call. “I think it would be a mistake for us to not focus on any of these areas which I think are going to be fundamentally important to the future.”
Meta recently debuted its new $1,499 virtual reality headset the company hopes corporations will be interested in buying for employees in lieu of computers. Meta has formed partnerships with Microsoft, Accenture and Zoom.
Investors have publicly expressed their dismay and called on Zuckerberg to rein in spending on the metaverse, a business proposition many analysts don’t see becoming lucrative for several years. Others have questioned Zuckerberg’s focus on virtual reality.
Meanwhile, Meta’s apps business, which includes Facebook and Instagram, continues to be profitable.
Zuckerberg says his company’s metaverse strategy also includes augmented reality and neural interface technologies, but these are still in phases of research and development.