Facebook and Mark Zuckerberg just raised a giant middle finger to Wall Street. The company says its metaverse business will lose even more money next yr.

• Facebook warned that its Reality Labs metaverse business will lose even more money in 2023.
• This yr, the company is on observe to burn by way of more than $10 billion on this endeavor.
• Shares of the company slumped 13% to their lowest stage since 2017.

Facebook is just not backing away from spending massive on constructing the metaverse, even as Wall Street begs it to reduce prices.

In releasing Wednesday its third-quarter outcomes, the company disclosed it has misplaced more than $9 billion thus far this yr on Reality Labs, the section of Facebook that handles all the pieces metaverse. It misplaced $10 billion over the entire of 2021, and the company mentioned spending prices for Reality Labs are solely going to continue to grow.

“We do anticipate that Reality Labs losses in 2023 will grow significantly year-over-year,” the company mentioned.

Sometime after 2023, Facebook, which final yr modified it is identify to Meta, mentioned it will start to “pace” its funding in Reality Labs, so as to “achieve our goal of growing overall company operating income in the long run.”

Shares of Facebook fell 13% in after hours buying and selling to the bottom stage since 2017.

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The dedication to spend a lot on the metaverse comes a few days after Altimeter Capital, a main Facebook investor, wrote an open letter to the company titled “Time to Get Fit” asking that it reel in bills. He particularly requested Facebook to restrict metaverse spending to $5 billion a yr. 

In the times earlier than Altimeter’s public request, Wall Street analysts took issue with the seemingly gradual price of improvement across the metaverse and Facebook’s core product, Horizon World. A most important a part of the immersive digital world Mark Zuckerberg is trying to construct out is avatars. So far, they nonetheless seem rudimentary and don’t do a lot of what Facebook confirmed off in its current developer convention. 

“Captain Zuckerberg continues to steer the Meta ship towards an unknown path called the Metaverse and is determined to splurge billions and billions of dollars in an endeavor to reinvent itself,” Neil Campling, head of TMT analysis at Mirabaud, mentioned.

Are you a Facebook/Meta worker or somebody with perception to share? Contact Kali Hays at [email protected], on safe messaging app Signal at 949-280-0267, or by way of Twitter DM at @hayskali. Reach out utilizing a non-work machine.