Meta Platforms, the billionaire’s social media empire, has been a Wall Street star since the start of the year.
The years go by but they are not the same for Mark Zuckerberg.
Last year, the one Elon Musk dubbed “Zuck the XIV” in an apparent nod to French King Louis XIV, famous for his arrogance and excesses, was the villain of Silicon Valley.
Meta Platforms shareholders took up arms against him.
They didn’t understand why the CEO latched on to the infamous metaverse, a virtual alternate world in which we interacted through avatars, using technological items like headsets and glasses. The idea was to build virtual and augmented technology. The concept resonated enormously during the pandemic, as everyone was in lockdown and people were looking for an escape.
For Zuckerberg, the metaverse was the new technological revolution, a kind of new frontier: In October 2021, Zuckerberg described a utopian future in which people would have immersive digital experiences, renaming it Facebook Meta Platforms. The company is the parent of Facebook, Instagram and WhatsApp.
A nightmare
The problem is that the reality on the ground was different from Zuckerberg’s dream. The metaverse was a sinkhole for Meta and gobbled up billions of dollars of investment. The Reality Labs unit, home to the metaverse projects, lost $4.28 billion in the fourth quarter of 2022, bringing its total operating loss for the year to $13.72 billion.
Unhappy to see Zuckerberg turn a deaf ear to their pleas to focus the company on its core business and forget about the metaverse, investors began selling Meta shares. By the end of October, the Meta stock had completely tanked. Meta shares, which started 2022 at $338.54, plunged to $93.16 as of October 31, a 72.5% drop in just 10 months.
The only thing that allowed Zuckerberg to remain captain of the sinking ship was the fact that he has the majority of the voting rights, which protects him from being removed as CEO. While the tech mogul had managed to survive, he had been greatly weakened by this stock market rout. At the end of May, Sheryl Sandberg, 52, Zuckerberg’s chief operating officer and right-hand man, resigned.
Ms. Sandberg joined Facebook in October 2008. She has been credited with transforming the platform into an online advertising giant. In fact, Sandberg was seen as the person who managed to help the Menlo Park, California firm monetize its audience. She was seen as a Silicon Valley heavyweight and one of the most powerful women in business, having formed, with Zuckerberg, one of the most prominent duos in the tech world.
Zuckerberg had also seen his personal fortune plummet. His net worth had fallen by $87.3 billion as of October 31, according to the Bloomberg Billionaires Index. Most of the tech luminary’s fortune is closely tied to the stock performance of Meta Platforms. Zuckerberg owns between 13% and 16.8% of Meta.
the revival
A few months later, luck smiled at Zuckerberg again. It all started with his decision to drastically cut costs and talk less about the metaverse, which no longer seems to be the group’s priority. On November 9, Meta announced 11,000 job cuts. Last month, the company announced an additional 10,000 job cuts, bringing the total to 21,000 job cuts in just five months.
He also stated that Meta (GOAL) – Get a free reporthe was entering an era of efficiency.
This new Zuckerberg attracted investors who applauded. Meta Platforms shares had closed at $96.47 on November 8, the day before the announcement of the start of the austerity cure. On April 3, the stock price was $213.07. Five months later, Meta’s share price skyrocketed 121%. This year, the rally is 77%, which translates to a market value increase of more than $240 billion in just three months. Meta’s market capitalization is currently $552.4 billion.
This stock market revival is also good news for Zuckerberg personally. Not only is his leadership no longer in question, but his fortune has also risen. Since the start of the year, he’s worth $32.8 billion more, according to the Bloomberg Billionaires Index. Thus, it weighs in at $78.4 billion as of April 3.
Zuckerberg is, after Tesla’s Elon Musk (TSLA) – Get a free report, the billionaire whose net worth has risen the most this year. He, who had disappeared from the top 20 of the greatest fortunes on the planet, now occupies 13th place in this ranking. He is only $11 billion out of the top 10. At the speed of his recovery, it is more than likely that he will once again occupy one of the top spots in the ranking that is dominated by tech moguls.
Therefore, the billionaire can say a big thank you to the cost cutting steps he took.
