Shares of Facebook’s parent company Meta took a major hit earlier this week, leading one financial expert to nearly break down on live TV and leaving CEO Mark Zuckerberg pleading with investors to be patient.
The Daily Caller noted: “Shares began their most recent plunge following a 4% decline in annual revenue reported Wednesday, marking the tech giant’s second straight quarter of decline, The Wall Street Journal reported Thursday. The company failed to impress investors with its virtual reality program known as the metaverse, ad revenue declined as inflation, competition from TikTok and new privacy rules on Apple devices kicked in and the company was hit with a nearly $25 million fine Wednesday for violating campaign finance laws.”
The tanking led CNBC financial analyst Jim Cramer humbled and nearly in tears during an emotional on-air apology Thursday for wildly misjudging the stock price, no doubt leading to investor losses. The outlet reported:
Shares of Meta plunged 24.5% Thursday as investors and analysts digested the company’s third-quarter earnings miss and a weak fourth-quarter outlook. Shares closed at $97.94, the lowest price since 2016.
The parent company of Facebook reported quarterly revenue of $27.7 billion Wednesday, a decline of more than 4% year over year and its second straight quarterly decline. Its profit plummeted 52% to $4.4 billion.
The company’s shares are down more than 61 percent on the year, the report added.
The financial news network’s “Squawk on the Street” hosts were analyzing the data and played a clip before Cramer began to apologize profusely for his past forecasts.
“There are a lot of things going on right now in the business and in the world and so it’s hard to have a simple, we’re going to do one thing and it’s going to solve the issues,” Meta CEO Mark Zuckerberg said in the clip. “There’s a lot of competition, there are challenges especially coming from Apple and then there’s some of the longer term things that we’re taking on expenses because we believe they’re going to provide greater returns over time.”
“By expenses, he means operating expenses up 19” percent, offered co-host Carl Quintanilla.
“Cash flow last year, $9.5 billion, now less than $1 billion,” Cramer responded.
“Let me say this, fellas. I made a mistake here. I was wrong, I trusted this management team. That was ill-advised. The hubris here is extraordinary. I apologize,” he added, emotionally.
“Okay, um, what did you get wrong?” co-host David Faber asked.
“I had a belief that there was a recognition that there is an amount that you can’t spend. Contrast that with Jim Farley, who took a project that was his, and closed it, because it was not ready. It was not near enough. This situation is almost a rogue situation,” Cramer noted further.
“I thought there would be an understanding that you just can’t spend, and spend through free cash flow, that there had to be some level of discipline, and I didn’t get it but, David, what did I get wrong? I trusted them, not myself, for that I regret. I’ve been in this business for 40 years, and I did a bad job. I’m not proud. I’m not proud,” Cramer said.
Meta shares were tumbling as billionaire Elon Musk moved into his new role as CEO of social media rival Twitter, reportedly firing several top executives on his first day.
Musk dismissed the current Twitter chief executive officer Parag Agrawal, chief financial officer Ned Segal, top legal and policy executive Vijaya Gadde, and general counsel Sean Edgett, according to a report from The New York Times that cited confidential sources. The report added that at least one executive was escorted out of the office after being fired.