The Facts
Meta (Facebook) shares plunged over 20% in after-market trading on Wednesday after the company released disappointing results for the final quarter of 2021.
For the first time, Meta broke down its financials to separate its core business, which focuses on social networking and relies on advertising revenue, from its VR hardware initiatives known as the Reality Labs.
The Spin
Narrative A
Meta's profits rely on its access to user data, which is sold to advertisers. Its advertising revenues are sinking because of the privacy settings and policies introduced by device makers like Apple and regulators in the EU, which protect users against Meta's invasive tracking systems.
Narrative B
Zuckerberg's bet on the metaverse is a longterm plan to escape from its dependence on other company's platforms. In the meantime, Meta remains enormously profitable, with Facebook alone bringing in $33.67 billion last quarter, a 20% increase over last year.
