Meta Platforms’ shares rose 19 percent when trading began in New York on Thursday after CEO Mark Zuckerberg announced plans to make the social media giant leaner, more efficient and more resolute.
If gains continue, Meta will post its biggest intraday jump since at least April, more than doubling its market value to about $472 billion from a Nov. 3 low.
Mr. Zuckerberg, who has spent the past year promising a distant future in a digital world called the Metaverse, has focused more on immediate issues, such as: He called 2023 the “Year of Efficiency”.
“We’re working on flattening our organizational structure and removing some layers of middle management to make decisions faster, as well as using AI tools to help our engineers be more productive,” Mr. Zuckerberg said at an earnings call on Wednesday with investors.
“We can still do a lot to improve our productivity, speed and cost structure.”
Mr Zuckerberg said the company uses AI to improve content recommendation – a strategy to make the platform more attractive to users and advertisers alike. Meta is still suffering from a slump in demand for digital ads, which make up the bulk of its revenue, particularly from clients in finance and technology.
But the company also pointed to some industries, including health and travel, where companies are spending more.
Fourth-quarter revenue fell 4 percent to $32.2 billion, the third consecutive period of decline. Still, the total beat analysts’ estimates, and Meta forecast first-quarter revenue of $26 billion to $28.5 billion, compared to a median forecast of $27.3 billion.
Analysts are predicting that Meta will get back on the growth path after the current period.
Snap, the parent company of rival social media app Snapchat, offered a less optimistic outlook on Tuesday, sending its shares down 10 percent.
Snap said it expects sales to decline in the current period, with CEO Evan Spiegel noting that the advertising slump appears to have bottomed out.
“Advertising demand hasn’t really improved, but it hasn’t deteriorated significantly either,” Spiegel said in a conference call.
Meta, whose shares are up 27 percent so far this year, is in retreat after the worst year for its stock in history.
The company faced a drop in ad demand due to weakness in the overall economy, as well as a change in privacy regulations on Apple’s iPhone, making it difficult for Meta to offer targeted advertising.
Meta cut 11,000 jobs in November in its first major layoff.
https://www.independent.ie/business/world/meta-shares-up-after-mark-zuckerberg-makes-efficiency-promise-42325551.html Meta splits after Mark Zuckerberg promises ‘efficiency’
