What’s a Name Worth? Since Name Change, Meta Platforms Stock Down 61%

Each of us has a name. They are unique to us. Sometimes a name serves as more than just a label; it aids in defining one’s identity. Sometimes we change our names. A person may adopt a nickname, whereas another person may formally change their name.

Businesses can benefit from these ideas as well. However, when a business changes its name, it occasionally causes uncertainty for investors.

meta logo name
Image by KNFind from Pixabay

A business name change is frequently a component of a rebranding plan. In certain instances, like with the business once known as Facebook and now branded as Meta Platforms, it’s intended to showcase a new vision. Consumers and businesses alike could stand to learn more about apps like Namsor, where users can check these new names before investing millions in them.

The rise of Facebook is followed by the problems of Meta Platforms

One of the most lucrative stocks during the past ten years was Facebook. Facebook shares increased significantly by 797% between its IPO in 2012 and the announcement of its name change in October 2021. Share prices have decreased by 61% since the name change in 2021.

There is little doubt that some of this price decrease is coincidental and can be attributed to poor timing. Many tech businesses, including several of Meta Platforms’ rivals, have seen large stock value losses over the past 15 months due to worries about rising interest rates and the possibility of a recession. However, there is also strong proof that Meta’s downturn is at least in part her own fault.

Mark Zuckerberg, CEO of Meta Platforms, has revised his goals for the social media behemoth: he now wants to turn the ideas of a metaverse into reality and turn his business into a significant entry point into the emerging metaverse.

Making that dream a reality will cost a lot of money. The component responsible for building the metaverse, Reality Labs, received an estimated $36 billion from Meta over the previous four years. That’s a startlingly enormous sum of money, especially considering that even Meta acknowledges the project won’t soon be profitable.

Investors are uneasy about this change in emphasis. Likewise, the name change is an indication that the business is fully committed to the metaverse. After all, you wouldn’t change your legal name unless you were serious.

The new name appears to be ineffective in this situation. The high profit margins of Facebook, which were based on the business’s huge ad income, attracted a lot of investors. However, operational margins have decreased from 50% or more in 2018 to about 30% at present, and they could worsen in the near future.

Investors are worried that Meta has strayed from the path of least resistance by devoting time, energy, and spatial computing resources to a project that will not be lucrative (generating profits). Even worse, the company’s name change merely serves to serve as a reminder to investors that management will not readily give in to pressure to return to the fundamentals.

Can Investors Buy Into Meta Platforms?

Although there has been a lot of bad news, Meta’s stock has recently done strongly, with share prices increasing by around 36% over the past two months. Yet despite these encouraging signals, Meta shares are down a startling 61% from where they were a year ago. Investors experienced similar modest bounces throughout the previous year.

Most investors are still dubious that the core narrative has changed. Due to Meta’s distinctive governance structure, Mark Zuckerberg continues to be the leading player. There hasn’t been a meaningful top-down turnaround, despite signals that the spending binge may be easing to once again concentrate on profitability. I would advise new investors to hold off buying this stock until that time.

Hot this week

Did David Wineland and Serge Haroche Steal Idea For The Nobel Physics Prize?

Dr. Omerbashich says the Royal Swedish Academy is a Crime Scene and he has the proof that Nobel laureates stole his discovery.

New Approaches to Disaster Relief Challenges

Disaster relief has always been a challenge. NASA, Google,...

3 Legitimate Money Making Methods to Supplement Your Income

In a perfect world, when your landlord raises your...

2016 Predictions by World Renowned Medium and Psychic Lindy Baker

World renowned medium and psychic Lindy Baker is interviewed by The Hollywood Sentinel, discussing psychic power, the spirit world, life after death, areas of concern in 2016, and much more.

Digital Coupon Customers Spending More Than Double At Stores

A new study shows that customers who use digital coupons go shopping more for groceries and other household goods more often and spend more on their shopping trips.

Setting the Scene in the Green Leadership Contest

An informative analysis of the UK Green Party leadership contest and its pro Palestinian stance on antisemitism, trans rights, and other human rights issues

When Celebration Becomes a Scapegoat

Celebration is not chaos, but neither is it a chance to jam a foreign culture down the throats of people who have long assimilated into a country.

The Comfort of Condemning Trump – and the Cowardice of Silence Elsewhere

It’s become something of a global reflex: condemn Trump. Dismiss him as a narcissist, a populist, a threat to democracy.

The Finance Herald and Top Under-the-Radar Finance & Tech Platforms Worth Exploring

In the vast landscape of financial and technological media,...

Is PolyPid Stock Undervalued? (NASDAQ: PYPD)

In the competitive landscape of biotechnology investments, discovering undervalued...

Israel’s Failed Narrative Dulls Victory In Battle

For years Israel's failure in its public diplomacy, what they call in Israel hasbara, meaning to explain, has been discussed ad nauseam and to no avail.

Related Articles

Popular Categories