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So that has lost forty five billion dollars on their Metaverse division and the stock dropped after their earnings report last Thursday. I believe when their guidance so we didn't really meet the expectation. Even though their revenue am expectations.
They're incredible.
Their revenue outpaced expectations, profits were doubles, but their guidance fell short and as a result, it dropped I think like fifteen percent. On Friday, they lost two hundred billion in market cup. So, okay, Ian, what's your take on this. I'm gonna come in listen.
I know.
Normally I'm on the other side of his argument. This is unfair like for them to have outperformed this well. Zuckerberg is still an incredible shape. All offices are on fire. Whatsappens doing incredibly well? Instagram is different. Put Sports Illustrated out of business. You got all the bikini girls on Instagram for free. They are the ultimate competitor, and they dropped fifteen percent because they're guiding lower for the next quarter.
Meanwhile, Dusk and Master was.
Saying, hey, Tesla may be the new n Ride, and they popped after earnings and then pop this morning after they get the China deal done, like it's one of those in it and I get it. I was talking to everyone a red Pandla in stock club about it. There was more upside on the Tesla trade at one thirty eight one thirty nine than there is the Meta trade.
But for Teslas, I mean, for a matter to the gap down fifteen percent, which I don't remember them ever gapping down that much, and earnings, I don't know what the analysts were thinking. Like normally I'm banging the table on the other side of this argument.
But when it dropped. I'm like, the fucking happened?
Like the numbers were great, this appear he was honest, and what's gonna happen next quarter?
And as a result, they fall fifteen percent?
But there's a keyer point. There's a key a point, So like I think I text you, I think I text you after Tesla and I'm like, yeah, makes sense of it because we got to explain the why, and so I had to dig really deep in the research to figure out, like, all right, fifteen percent is crazy and meta. Over the past few years, we've seen historic drops, right, like they had the large decline in.
History, but they've also had the largest appreciation history.
This fifteen percent, this is when the honesty part of being a CEO and a leader actually backfired for him. But yes, it may it made sense why so yes, the numbers doubling, profits, revenues is up twenty seven percent.
They actually increased their average ad price by six.
Percent, so they see more people put it as they raise the prices on those the weak guidance was cast for it. But what he admitted to is that they're going to have to increase the spending in AI. They want to be the leaders in it. They want to have the infrastructure for it, they want to have the platform for it, they want to be the innovators in it. So you would think that would be a good time. I want to get leaded behind. On the surface, it
is a good sign, so that increase. I think he said up to ten billion a year in the AI spending, which is a futuristic technology.
Correct, yes, So then we have to peel back the layers.
How much money or what was the last futuristic innovation that they said they were going to spend money on.
I get it the metaverse. I've waived that flag loud and clear. But guess what when you have market makers, how much.
Did it lose? Quadrullions?
It was a lot, a fifty billion dollar futuristic innovation that didn't pan out. You're now telling investors we're going to spend more on a futuristic now we know that this has a use case, right, which should be since the future literally we can see it like we've see it now, we're using it now, it has cuse. So
there was there were some paws in that, right. People are looking like, well, they're going to spend more, We're not gonna be able to recruit it, and Zuckerber said, we're not going to be able to see profits from the spending until maybe twenty twenty seven.
And so now you're.
Telling investors futuristic innovation, we're going to put more capital into it. People have seen it over the past three years, the future innovation they lost money in as an investor fifty percent.
I mean, it doesn't make sense.
But those are some of the is that I fear, yeah, that look, that's that that that slight fear of investigato the future again and what if it doesn't work?
The different main differences between Metaverse and this spend is that Meta wasn't a hardware company, per se, and no one wanted the glasses. The AI move is in play by Apple, Microsoft, Cisco, and Video Intel if you want to throw them in the race. So there's already a market for it. Then if you look at the gross margins eighty percent, the Meta AI isn't bad.
And they also made the operating system for.
Their glasses open source, which I think was a brilliant move to be able to have something open source in an era where like Apple is too closed to let developers develop on that platform. And of course because they're not in the lead and that they're letting that be open source. But I think they made a lot of great moves these last two quarters. I think that that's kind of like being like, well, I'm not going to listen to Ian because you call square, what about the
fifteen hundred other great things? I'll call right Like, he got that one thing wrong and I was the main one wave in that flag. But if you look at Instagram, even Messenger, the amount of uses they have on Messenger, Facebook is still moving for the older crowd. I think he's doing a hell of a job running that organization, and in profits will higher. I like that the profit margins twenty percent, gross margin is eighty.
You can't yeah, you can't argue with that. So I think it was a mistake. And it's had a tremendous run.
So even with the fifteen percent pullback that the run that has had over the past.
Two quarters has been incredible. Yea, So people who have some profit take Yeah.
So if you've been in the stock since it was down in the one hundreds one sixties, and you've wrote this thing all the way up to four hundred four fifty, fifteen percent pull back. Yeah, okay, a slight correction that makes sense of it.
Yeah, well I spoke to it in cider. Are you telling me this?
Yeah? Yeah, Anonymous.
So so I'll share what he had to say about right after the earnings came out and it was crashing, and he said revenue was up by twenty seven percent. We're increasing cap x for artificial intelligence, and the same risks that always persisted are there. Q one results are instantly positive, especially with twenty seven percent year over year growth in revenue. Market is over reacting at the moment. I agree with that he said what we just said.
But yeah, I think it's interesting the kind of hair from I mean that that even confirms, like kind of what we just said, like perfect if there's an insight who was saying the same exact thing I think this is about. I think the CFO might be to blame too, because she gave a very pessimistic outlook in her in the guidance. So that's interesting. While she would do that,
I'm not sure, but I think that she. I don't think her guidance report was something that they probably were happy about, or maybe they wanted to stock to go down so they could buy more who knows, but she the CFO gave a very pessimistic guidance.
Outlook for the second quarter, right, Yeah, and so it wasn't even a full guidance for the entire year.
So I mean take that with a grain of salt.
But medis here to stay, not going anywhere.
Yeah, and we got to reward seeos. To be honest, I'm not going to continue rail on Elion.
But yeah, but Jesus Christ children, but the children.
He hasn't delivered on some promises, the mouse per gallon that the carr can get at best. I think Dustin went a little bit far calling at the new airon, but math is not mathing.
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