In most market environments, a company with one of the lowest valuations in the Nasdaq 100 Index, a solid balance sheet and sales growth averaging 34 per cent a year would be an obvious buy. In the case of Meta Platforms, it is not so obvious.
Since the company’s chief executive Mark Zuckerberg’s announcement a year ago of a name change and strategy overhaul for the owner of Facebook, the stock has wiped out more than half the gain it had accumulated since its initial public offering a decade ago.
That’s cost Meta $600 billion in market value and a spot in the elite club of the US’s 10 biggest companies.
Analysts predict Meta’s revenue will drop this year for the first time ever, as competition and cooling economies, among other factors, cut into ad sales. User growth at its flagship product, Facebook, has slowed as a younger generation flocks to newer sites such as TikTok.
Meanwhile, the company is spending billions to realise Mr Zuckerberg’s vision of the metaverse, that still-to-be-realised virtual world where people will work, shop and socialise.
“There’s so many red flags relative to Meta,” said Matthew Kanterman, director of research at Ball Metaverse Research Partners.
Which brings us back to the case for Meta being an obvious buy. So-called value investors, who love stocks that are widely out of favour, already started to build positions in the company this year.
They may find it even more attractive now that it’s priced at only 10 times forward earnings, down from an average of 28 over the past decade and cheaper than old-school, dotcom-era tech favourites such as Intel and Cisco Systems.
Analysts predict that sales growth will resume in 2023 and rebound to double digits the year after that. The Menlo Park, California-based company is focused on capitalising on Instagram Reels, its rival to the TikTok video-sharing app.
And Mr Zuckerberg last month said the company will freeze hiring and restructure some teams to trim expenses and realign priorities, an acknowledgement that its days as a growth darling are over.
“While macro challenges persist, we believe improved Reels monetisation, newer ad formats and a greater focus on expenses create a compelling risk/reward in shares,” Ronald Josey, a Citigroup analyst, wrote in a report last week. He predicts the stock gaining 70 per cent in the next year.
Still, Meta is one for the brave in a world where tech stocks face an uphill battle of rising interest rates. The stock has fallen 61 per cent in 2022, almost double the decline of the Nasdaq 100, pushing its market value down to around $350bn from more than $1 trillion at its peak last year.
The bio
Favourite book: The Alchemist by Paulo Coelho
Favourite travel destination: Maldives and south of France
Favourite pastime: Family and friends, meditation, discovering new cuisines
Favourite Movie: Joker (2019). I didn’t like it while I was watching it but then afterwards I loved it. I loved the psychology behind it.
Favourite Author: My father for sure
Favourite Artist: Damien Hurst
More from Rashmee Roshan Lall
The biog:
Languages: Arabic, Farsi, Hindi, basic Russian
Favourite food: Pizza
Best food on the road: rice
Favourite colour: silver
Favourite bike: Gold Wing, Honda
Favourite biking destination: Canada
Groom and Two Brides
Director: Elie Semaan
Starring: Abdullah Boushehri, Laila Abdallah, Lulwa Almulla
Rating: 3/5
The alternatives
• Founded in 2014, Telr is a payment aggregator and gateway with an office in Silicon Oasis. It’s e-commerce entry plan costs Dh349 monthly (plus VAT). QR codes direct customers to an online payment page and merchants can generate payments through messaging apps.
• Business Bay’s Pallapay claims 40,000-plus active merchants who can invoice customers and receive payment by card. Fees range from 1.99 per cent plus Dh1 per transaction depending on payment method and location, such as online or via UAE mobile.
• Tap started in May 2013 in Kuwait, allowing Middle East businesses to bill, accept, receive and make payments online “easier, faster and smoother” via goSell and goCollect. It supports more than 10,000 merchants. Monthly fees range from US$65-100, plus card charges of 2.75-3.75 per cent and Dh1.2 per sale.
• 2checkout’s “all-in-one payment gateway and merchant account” accepts payments in 200-plus markets for 2.4-3.9 per cent, plus a Dh1.2-Dh1.8 currency conversion charge. The US provider processes online shop and mobile transactions and has 17,000-plus active digital commerce users.
• PayPal is probably the best-known online goods payment method - usually used for eBay purchases - but can be used to receive funds, providing everyone’s signed up. Costs from 2.9 per cent plus Dh1.2 per transaction.
Labour dispute
The insured employee may still file an ILOE claim even if a labour dispute is ongoing post termination, but the insurer may suspend or reject payment, until the courts resolve the dispute, especially if the reason for termination is contested. The outcome of the labour court proceedings can directly affect eligibility.
- Abdullah Ishnaneh, Partner, BSA Law
THE BIO
Occupation: Specialised chief medical laboratory technologist
Age: 78
Favourite destination: Always Al Ain “Dar Al Zain”
Hobbies: his work - “ the thing which I am most passionate for and which occupied all my time in the morning and evening from 1963 to 2019”
Other hobbies: football
Favorite football club: Al Ain Sports Club
EXPATS
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History's medical milestones
1799 - First small pox vaccine administered
1846 - First public demonstration of anaesthesia in surgery
1861 - Louis Pasteur published his germ theory which proved that bacteria caused diseases
1895 - Discovery of x-rays
1923 - Heart valve surgery performed successfully for first time
1928 - Alexander Fleming discovers penicillin
1953 - Structure of DNA discovered
1952 - First organ transplant - a kidney - takes place
1954 - Clinical trials of birth control pill
1979 - MRI, or magnetic resonance imaging, scanned used to diagnose illness and injury.
1998 - The first adult live-donor liver transplant is carried out
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