In late October, CEO Mark Zuckerberg announced Facebook’s name change to Meta, a rebranding that underscored the company’s commitment to the still-nascent metaverse as the future core of its business.
The metaverse is the concept of an immersive collection of digital spaces and worlds navigated by internet users via 3D avatars. Many developers, including Zuckerberg, believe the metaverse will become the future hub of work, shopping, entertainment, and social interaction.
Markets have been cool to the company’s shift in focus. Since the announcement in October, Meta’s stock has fallen almost 42%. In February, it dropped 26% in a single day, on the heels of a Q4 2021 earnings report that revealed stagnant user growth as the company shifted its resources to metaverse-related ambitions.
Today’s stock drop comes during what has been a difficult quarter for the stock market generally, and for crypto-related companies specifically. The Nasdaq was down 2.75% today; Meta’s drop was more than double that.
Does today’s drop imply a further loss of confidence in Zuckerberg’s metaverse pivot? Or is it merely the practical result of the symbol change itself, a logistical hurdle that can impact trading volume? Financial news service Barrons noted today that researchers had found a “significant reduction in trading volume” tends to follow a ticker change.
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