In 1992, author Neal Stephenson published a sci-fi book called Snow Crash, in which he articulated fantasy about electric cars, wireless technology, smartphones, and the metaverse. Yes, the same metaverse that inspired Mark Zuckerberg to rename Facebook to Meta. The metaverse is a virtual 3D landscape that can let people connect or teleport without physically travelling anywhere. For example, you can attend a conference in Paris via your 3D Avatar from the comfort of your home in India.
Zuckerberg’s optimism about a technology in its infancy is commendable, but does that make Meta a good investment option? Let’s find out.
How is Meta performing?
Facebook was founded in 2004, and it went public in 2012 at a valuation of $104 billion. Since then, it has experienced several major ups and downs, as is quite common for big stocks. Currently (as of 19 July 2023), its market cap stands at around $800 billion.
Take a look at Meta’s financials below:
(Amounts in billions of USD)
| Q1 2023 | Q4 2022 | Q3 2022 | Q2 2022 | Q1 2022 | Q4 2021 | |
| Revenue | 28.6 | 32.2 | 27.7 | 28.8 | 27.9 | 33.7 |
| Operating Margin | 23.56% | 24.82% | 29.74% | 33.41% | 36.68% | 39.65% |
| Net Margin | 18.27% | 19.90% | 24.41% | 28.16% | 31.20% | 33.38% |
Where does Meta’s revenue come from?
Meta’s largest source of revenue is advertising on its various social media platforms. Let’s look at its revenue structure below to get a better idea.
| Business Segment | Revenue Contribution in % | Revenue Contribution in USD (2022) | Source of Income |
| Family of Apps | > 98% | 114.45 billion | Advertising on Instagram, Messenger, third-party affiliated websites, and apps. |
| Reality Labs | 1.85% | 2.16 billion | AR and VR products and services. |
The stock performance of Meta
Meta stock has performed reasonably well over the years, as is evident in the table below.
| Year | Average Share Price | Year High | Year Low | Yearly Change |
| 2023 | $216.05 | $313.41 | $124.74 | 159.31% |
| 2022 | $180.18 | $338.54 | $88.91 | -64.22% |
| 2021 | $321.16 | $382.18 | $245.64 | 23.13% |
| 2020 | $234.55 | $303.91 | $146.01 | 33.09% |
Who has stakes in Meta?
At the time of FB IPO, Mark Zukerberg owned 28% of company stock, but his holdings currently stand at around 13.6%. Some major institutional shareholders in Meta are:
- Vanguard Group, Inc.
- FMR, LLC
- Blackrock Inc.
- State Street Corporation
- Capital World Investors
- Price (T.Rowe) Associates Inc
- Capital International Investors
- Geode Capital Management, LLC
- Norges Bank Investment Management
The Bottom Line
Meta has an early-mover advantage in the AR/VR space. At the same time though, the company is on the regulatory radar with global concerns over users’ data privacy. If you are already invested in FB, we suggest you hold it for the long term till the clouds clear.
If you wish to invest in Meta without increasing the risk profile of your portfolio, Appreciate has the solution for you. You can choose the ETF option to invest indirectly in Meta and still get the benefit of its upside potential. There is no minimum investment requirement and the fees are also on the lower side. Get in touch with us to know more about how you can leverage this opportunity and build a diverse and global portfolio!
