This is a horrible week for Meta, previously known as FaceBook.
Shares of Meta dropped nearly 30% during October 27th pre-hour trading from $129 to $100.
Why META fell so hard
Meta released their earnings report, the social media giant reported quarterly revenue of $27.7 billion—down more than 4% year-on-year—its second consecutive quarter of revenue decline. Meta’s Reality Labs division, which is leading the company’s pivot towards building a metaverse, reported a $3.7 billion loss in the third quarter, bringing its total losses so far this year to $9.4 billion. Year over year, Meta has been losing billions pivoting over from social media aspect to virtual reality.
“Reality Labs expenses are included in our total expense guidance. We do anticipate that Reality Labs operating
losses in 2023 will grow significantly year-over-year. Beyond 2023, we expect to pace Reality Labs investments
such that we can achieve our goal of growing overall company operating income in the long run.”Source: https://s21.q4cdn.com/399680738/files/doc_financials/2022/q3/Meta-09.30.2022-Exhibit-99.1-FINAL.pdf
META’s $25MM fine
Next up is, META being fined $25 Million for violating campaign finance disclosure law. In what is thought to be the highest campaign finance penalty in American history, a Washington state judge on Wednesday fined Facebook parent corporation Meta almost $25 million for repeatedly and willfully breaking the law requiring campaign contribution disclosure.
According to Washington’s transparency law, ad vendors like Meta are required to keep track of and make public the names and addresses of people who purchase political advertisements as well as the target audience, method of payment, and total number of views for each ad. Anyone who requests it must receive the information from the ad sellers. Newspapers and television networks have consistently abided by the law.
But Meta has consistently protested the regulations, claiming in court that they “unduly burden political speech” and are “nearly hard to completely comply with,” making them unlawful. Facebook does retain a record of the political advertisements that are placed on its site, but the record does not contain all of the information that is required by Washington’s statute.
The normal fine for each infraction of the statute is $10,000, but if the judge determines that the infraction was deliberate, the fine might be treble. For each of its 822 offenses, North fined Meta $30,000, totaling nearly $24.7 million. The fine, according to Ferguson, was the biggest campaign finance-related fine ever levied in the United States.
