Shares fell as much as 19 percent

Mark Zuckerberg kicked off Matt’s results conference by talking about artificial intelligence. He then moved on to the metaverse, praising his company’s headsets, glasses and operating system. He focused almost his entire opening speech on the many ways Meta loses money.

Investors were not in favor of it. Shares of Meta fell as much as 19 percent in extended trading on Wednesday, wiping out more than $200 billion in market capitalization. The drop came despite Meta reporting better-than-expected first-quarter profit and revenue.

Zuckerberg seemed ready to sell out.

“I think it’s worth mentioning that we’ve seen a lot of volatility in our stock during this stage of our product playbook where we’re investing in scaling a new product, but we’re not monetizing it yet,” Zuckerberg said. He cited past efforts such as short video services Reels, Stories and the move to mobile.

Meta generates 98 percent of its revenue from digital advertising. But to the extent Zuckerberg was talking about ads, he was looking to the future and ways the company could potentially turn its current investments into advertising dollars. Discussing Meta’s efforts to build “leading artificial intelligence,” he said:

– There are several ways to build a big business here, including targeting business messages, introducing ads or paid content into AI interactions.”

He also talked about Meta Llama 3, the company’s latest major language model, and the recent introduction of Meta AI, the company’s answer to OpenAI’s ChatGPT.

Zuckerberg then moved on to potential expansion opportunities within the mixed reality headset market, such as work or fitness headsets. On Monday, Meta opened up access to the operating system that powers its Quest headset, which Zuckerberg said will help the mixed reality ecosystem grow faster.

He also talked about Meta’s AR glasses, which he called “the ideal device for an AI assistant because you can let them see what you see and hear what you hear.”

Meanwhile, the Meta Reality Labs unit, which houses the company’s hardware and software for developing the new metaverse, continues to burn money. Reality Labs reported first-quarter sales of $440 million and a loss of $3.85 billion. The department’s cumulative losses since the end of 2020 have exceeded $45 billion.

Zuckerberg bought himself some time.

Meta’s share price has nearly tripled in the past year and, as of Wednesday’s close, is up 40% in 2024. It hit a record $527.34 in early April.

(See Biz)