Meta: In Limbo

From “In Zuck We Trust?” (February 2026):

“I’m unconvinced by the claim that Meta management is changing their behavior to satisfy the near term interests of Mr. Market… My suspicion, based on what they did during an even more difficult period in 2022, would suggest the opposite (in that case, effectively leaning further into short-term financial pain, as opposed to making a compromise on FRL losses)… There’s a somewhat unique (outsized) need with Meta to trust management’s ability to make sound long-term decisions. That has been the case for many years – and thus far, long-term investors who held steady, who have implicitly said ‘in Zuck we trust’, have been well rewarded for doing so. Time will tell if that remains true as the level of investment once again reaches new heights.”

In September 2022, a few weeks prior to Meta reporting a 4% revenue decline in Q3 FY22, CNBC published an article highlighting a list of challenges at the company: “Facebook scrambles to escape stock’s death spiral as users flee and sales drop... I’m not sure there’s a core business that works anymore... They are not winning the next generation [of users].”

The timing of that article corresponds to the middle of the chart below, i.e. when TTM revenues started moving in the wrong direction after a long period of impressive growth. As I wrote at the time, my take on Meta’s core business was more optimistic than the sentiment expressed in that CNBC article: “While the short-term presents significant challenges, Meta is among the few competitors well positioned to navigate through this environment. The timing on both internal and external headwinds are uncertain, but I remain confident that Meta will emerge as a stronger business on the other side.”