Facebook's identity crisis is costing Zuckerberg billions, and he's ok with it

Meta CEO Mark Zuckerberg said the company is committed to the metaverse.

Facebook/Meta

• Meta expects "significantly" higher losses for the Reality Labs unit handling the development of the metaverse.
• CEO Mark Zuckerberg said Wednesday that investors who are patient will "end up being rewarded." 
• Meta's share price slumped nearly 20% to $104.30 in after-hours trade, following its earnings announcement. 

Meta's pursuit of the metaverse could see further pain ahead, with the company projecting "significantly" higher losses in 2023 for the unit overseeing its development — but CEO Mark Zuckerberg seems ok with playing the long game.

He even urged investors to be patient, saying those who invest in Meta will "end up being rewarded."

But that didn't assuage Wall Street. Meta's share price slumped nearly 20% in after-hours trade on Wednesday to $104.30, following the company's earnings announcement. They are now down almost 70% so far this year.

Reality Lab, Meta's unit overseeing the metaverse activities, reported $3.67 billion in losses for the third quarter of 2022, which ended on September 30. This brought the division's total losses since the start of 2021 to just under $20 billion. 

"We do anticipate that Reality Labs operating losses in 2023 will grow significantly year-over-year," David Wehner, the CFO of Meta, said in a press release announcing the company's third-quarter earnings on Wednesday.

Despite this, Zuckerberg said on an earnings call Wednesday that, "people are going to look back decades from now" and talk about the importance of the project.

"I get that a lot of people might disagree with this investment. But from what I can tell, I think that this is going to be a very important thing, and I think it would be a mistake for us to not focus on any of these areas, which I think are going to be fundamentally important to the future," Zuckerberg said during a call with analysts, per a transcript.

Zuckerberg backed his commitment to the metaverse on the call, saying it's not just about VR headsets, which most people associate with the project, as it was first thing Meta launched. But it's a "pretty wide portfolio" with other initiatives, such as a social metaverse platform, Zuckerberg added.

Right now though, it's still an early version of the final product that still has a long way to go before it comes "what we aspire for it to be," he added.

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