It goes without saying that technology has played such a significant role in society.
Now all activities have turned to the internet and often some versions of the real-life version have been improved online. Platforms such as Casino NetBet allow users to have a gaming experience like no other which only proves how much technology has advanced in the last couple of years.
One of the most popular social media platforms, Facebook, now known as Meta, has seen a lot of ups and downs in the prices of its stock over the past few years. Facebook has remained a high-profile company since its initial public offering in 2012 with its stock being held by both institutional and retail investors. Though the stock prices rose smoothly after the IPO, concerns regarding data privacy have been punctuated by shareholders time and time again.
While the stock prices plummeted in the beginning of 2021, Meta shares have considerably recovered in the last few months. The shares reached an all-time high in August of last year.
However, there is great uncertainty regarding the future prices of Meta stock.
It’s widely believed that Meta platforms are unlikely to generate big returns over the course of next two years. Nonetheless, there’s evidence to support the contrary. Many investors are unconvinced about the direct profit potential of Meta as the recent rise in stock price has made up for the lost time.
As we enter 2022, there are many risks facing Meta stock, including the introduction of new social media platforms.
Facebook was rebranded to Meta as its founder believes that the new name signals the future of the company i.e. the Metaverse. The metaverse is a digital universe powered by virtual reality, augmented reality, artificial intelligence, and a few other advanced technologies. The ‘Metaverse’ became the buzzword in the tech sector after the rebranding of Facebook. Google searches for the term have increased greatly in the last three months.
Though many companies have high hopes on the metaverse, the founder of Meta says that there won’t be big returns for the shareholders in the near future. Mark Zuckerberg, founder of Meta, has suggested that e-commerce is a key component of the metaverse strategy of Meta.
Although Zuckerberg has huge plans for the future, the metaverse is not going to be a slam dunk for Meta platforms as Facebook has failed to become a major player in e-commerce despite trying for years. Additionally, the social media space is becoming increasingly saturated with more than 160 firms competing in the sector.
Zuckerberg has repeatedly emphasized that Meta stocks have massive potential in the long run. Meta is going to see a giant slump before it sees all the upsides of its metaverse strategy. The metaverse plans of the company may not be able to yield big returns for the investors over the next few years, if ever.
Currently, there seems to be significant uncertainty associated with the core ad business of Meta. On top of that, competing social networking platforms, PR issues, and intervention by governments and regulatory bodies have worsened the situation for the platform. The platform may see a surge in its revenue this year, although that won’t be able to move the needle for its top shareholders in the next few years.
Facebook or Meta stock is not a good buy in 2022 especially for investors who want immediate yields. The revenue growth of Meta is very unlikely to outperform the average surges of S&P 500, rendering the shares unsuitable for both retail and institutional investors.
