Meta, the company that owns Facebook, Instagram and WhatsApp, saw its stock plunge after-hours Wednesday after reporting a rare decline in its fourth quarter profit due to a sharp increase in expenses.
Meta's shares fell 22.6% to $249.90 in after-hours trading.
The Menlo Park, Calif.-based company said it earned $10.29 billion, or $3.67 per share, in the final three months of 2021. That's down 8% from $11.22 billion, or $3.88 per share, in the same period a year earlier. Revenue rose to 20% to $33.67 billion.
Analysts, on average, were expecting earnings of $3.85 per share on revenue of $33.36 billion, according to a poll by FactSet.
Meta Platforms Inc., formerly Facebook, took on its new name last fall to signal CEO Mark Zuckerberg's ambition to become what he called a "metaverse company." Since then, the company has been shifting resources and hiring engineers -- including from competitors like Apple and Google -- who can help realize his vision.
The metaverse is sort of the internet brought to life, or at least rendered in 3D. Zuckerberg has described it as a "virtual environment" you can enter instead of just viewing it on a screen. Theoretically, the metaverse would be a place where people can meet, work and play using virtual reality headsets, augmented reality glasses, smartphone apps or other devices.
Zuckerberg is betting that the metaverse will be the next generation of the internet because he thinks it's going to be a big part of the digital economy. He expects people to start seeing Meta as a "metaverse company" in the coming years, rather than a social media company.
For now, though, the metaverse exists only as an amorphous idea dubbed by a science fiction writer. It's not yet clear if it'll be the next iteration of human-computer interaction the way Zuckerberg sees it, or just another playground for techies and gamers.