Facebook's Meta Platforms is buying back shares to keep losing billions
Late last month, Meta Platforms reported a loss of $2.81 billion on $452 million in revenue from its VR division Reality Lab. Since rebranding over a year ago, the social giant has lost $0.5 trillion in market capitalization to reflect its focus on the metaverse.
Meta is not throwing the towel. The company plans to invest $10 billion on its metaverse in order to reflect the company's new vision. In the European Union last year, Meta said it plans to hire 10,000 people to build a metaverse. Zuckerberg said that the metaverse is a major investment for the company and plays a crucial role in the company going forward.
Meta said on Tuesday it had raised $10 billion in its first-ever bond offering to further ramp up its business and pursue its metaverse ambitions. The social giant will be able to buy back some of its struggling shares and build a more traditional balance sheet with the help of the new fund.
Meta isn't the only tech company that is buying back shares. Other tech companies such as Apple and Intel Corp recently issued bonds, raising $5.5 billion and $6 billion.
The metaverse can be described as a digital world where real and virtual worlds can be converged into a vision of science fiction, even though it is still in a nascent stage. You can think of the metaverse as a virtual world where millions of people could work, play, and socialize in immersive virtual environments and communicate across shared spaces across different platforms.
Meta also lost 500,000 daily users early this year. The company reported a decline in the company's profit. Zuckerberg blamed TikTok, the short video platform we discussed above, for the user decline.
Meta posted a gloomy forecast and reported its first quarterly drop in revenue, despite the fact that it was facing a recession and competitive pressures on its digital ads sales.
Facebook's Meta continues to lose billions in pursuit of the metaverse, losing $6 B on its metaverse project and growing.