The Worst Part of Meta’s Earnings Was… | The Daily Peel | 10/28/22

Oct 28, 2022 | Peel #326

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Market Snapshot

The worst part of Meta’s warnings was…

How management is running a good thing into the ground. Continuing to invest in the metaverse pipedream in a down market for ad spending is a head-scratcher.

Downtown Josh Brown said on CNBC that “this is a company with amazing fundamentals, horrendous sentiment…you’d rather it that way than the other way around.”

In other news, US GDP grew 2.6% in the quarter on the back of a resilient consumer.

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Macro Monkey Says

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What's Ripe

What's Rotten

Meta ($META) ↓ 24.56% ↓

• Just waiting until Zuck decides to broadcast an earnings call all alone in the metaverse
• Q3 was a sh*t sandwich…revenue down, losses expected to accelerate next year, no ROI from the metaverse in sight

Credit Suisse ($CS) ↓ 20.04% ↓

• $CS is turning to the unlimited supply of Saudi wealth to pivot its business away from pesky Wall Street
• Imminent collapse seems to be off the table for now, but investors were jittery about such a big change for the 166-year-old firm

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Thought Banana

Wonder Boy Founders Lose Their Luster

Whether Zuck is part robot or just a very strange human being, you don’t get onto the Forbes billionaire list without some combo of smarts and skill.

But founding a revolutionary company and riding a subsequent bull market wave is very different from executing a massive pivot just as a recession hits.

• His supervoting shares give him near-total decision-making power
• Internal memos show many Meta employees think the metaverse is a waste of time, and the company has had to beg them to spend more time within it
• The dude has made it clear he doesn’t give a f*ck what people think, including his investors
• Snap is another high-profile meltdown with a founder that calls all the shots

The big question: Will investors reject the kind of unilateral power Zuck has from other founders in the future after seeing his decisions crater the company?

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