Late last month, Facebook-parent Meta Platforms reported a loss of $2.81 billion on $452 million in revenue from its VR division Reality Lab. That’s not all. The social giant has lost at least $0.5 trillion in market capitalization since it rebranded over a year ago to reflect its focus on the metaverse.
But Meta is not throwing the towel. Instead, the company is doubling down and plans to invest $10 billion on its metaverse to reflect the company’s new vision. Last year, Meta said it plans to hire 10,000 people in the European Union to build a “metaverse.” Zuckerberg added that metaverse is a major investment for the company and plays a vital role for the company going forward.
To further ramp up its business and pursue its metaverse ambitions, Meta said on Tuesday it had raised $10 billion in its first-ever bond offering. The new fund will also enable the social giant to buy back some of its struggling shares and build a more traditional balance sheet.
Meta is not the only tech company buying back shares. Other big tech companies such as Apple and Intel Corp have also issued bonds recently, raising $5.5 billion and $6 billion, respectively.
Although still in a nascent stage, the metaverse can be described as a digital world where the real and virtual worlds converge into a vision of science fiction. You can also think of the metaverse as a virtual world where millions of people could gather to work, play, and socialize in immersive virtual environments and communicate across shared spaces across different platforms.
Early this year, Meta also revealed it lost 500,000 daily users. That was not all. The company also reported a declined profit. Zuckerberg blamed the user decline on TikTok, the short video platform we discussed above.
With heightening fears of recession and competitive pressures weighing on its digital ads sales, Meta posted a gloomy forecast and recorded its first-ever quarterly drop in revenue.
Meanwhile, Facebook’s Meta continues to lose billions in pursuit of the metaverse; already lost $6B on its metaverse project and growing.