Meta Platforms Inc
(NASDAQ:META) share price

What does the company do?

Meta’s aim is to connect users across the world through its social networking sites and platforms that are available on mobile devices, personal computers, and in-home devices. It also sells advertisement placements to marketers that follow a variable pricing model based on viewing habits, likes and shares, and engagement levels.

The business is split into two segments: Family of Apps (FoA), which consists of its main platforms such as Facebook, Instagram, and WhatsApp; and Reality Labs (RL), which includes augmented and virtual reality-related hardware, software, and other forms of content. The latter segment is a relatively new addition to Meta’s business model and has received more emphasis since the company’s rebrand in 2021.

What are Meta’s subsidiaries?

Facebook

The largest social media platform in the world with almost 3 billion monthly active users, Facebook was originally created in 2004 with the intention of connecting Harvard students with one another. The founders had the idea of bringing the social experience of college life to the internet, which was relatively undeveloped at the time. After great expansion, Facebook now allows users to connect with friends and family, discover what’s going on in the world, and share and express what matters to them.

Instagram

Instagram is a photo and video sharing network founded in 2010 by Kevin Systrom and Mike Krieger, and acquired by the parent company in 2012 for around $1bn. It has over 1 billion monthly active users that can take, edit, and publish visual content for others to “like”, comment on, share, or save. Instagram’s demographic is predominantly younger than that of Facebook, with around 60% of its audience between the ages of 18 and 34, according to Hootsuite.

WhatsApp

WhatsApp Messenger is an instant messaging and voice-over-IP platform that was founded in 2009 by Brian Acton and Jan Koum. It was acquired in 2014 for almost $20bn. Through the mobile app, users can send text and voice messages, make voice and video calls, and share other forms of audio-visual content. WhatsApp is the most popular messaging app worldwide with over 2 billion monthly active users.

Others

While the above three platforms account for the majority of Meta’s revenue and customer base, the company owns over 70 smaller apps and platforms that align with its core product of social networking services. These include Facebook Messenger (an instant messaging app developed by and serving Facebook), PrivateCore (a venture-backed start-up that provides secure server technology to various enterprises), Oculus VR (a producer of virtual reality headsets and equipment), Giphy (an animated platform that allows users to search for GIFs), and Kustomer (an omnichannel software-as-a-service platform designed for customer service).

Company statistics

In total, Meta’s brands and subsidiaries have more than 7 billion monthly active users, according to data from Statista.

Advertising revenue accounts for almost 98% of total revenue, with ads particularly prominent on mobile devices. The remaining 2% is usually produced by payments and other fees. Facebook reported in 2021 that it has over 10 million advertisers internationally.

The company has over 94 offices across 37 countries, and an employee count of almost 70,000.

An overview of FB stock

Meta Platforms is listed under the ticker FB on New York’s Nasdaq exchange, which is noted for hosting many innovative technology companies. The stock debuted in 2012 with an initial share price of $38. That gave FB a market capitalisation of $104bn, making it the biggest IPO of the year. It’s a constituent of the blue-chip Nasdaq 100 and is also listed on the S&P 500 index.

Since going public, the company has been popular with long-term investors due to consistent revenue growth, positive cash flows and balance sheets, and the increasing significance of technology in modern life. Facebook’s share price saw a steady upwards trend between 2012 and 2018, increasing by over 500%.

In 2018, the company suffered a drop of almost 20% after reporting lower-than-expected revenue and user statistics for the second consecutive quarter. Several scandals involving data leaks and fake news emerged around the same time, exacerbating its poor performance. One particularly notable incident was the Cambridge Analytica scandal, when Facebook was reprimanded for its handling of users’ personal data, which was harvested for use in political campaigns.

However, Facebook bounced back from this controversy the following year, continuing to grow its user base and average revenue per user, making up for previous losses.

In June 2021, Facebook Inc was the fifth company in the world to reach a market capitalisation of $1tn, its share price peaking at over $355.

Why did Facebook Inc rebrand?

In October 2021, Zuckerberg announced at the Connect annual conference that Facebook Inc would be changing its name to Meta Platforms in order to bring the company’s apps and technologies under one new brand.

Its focus is to bring the metaverse to life and help people connect, find communities, and grow businesses. The term ‘metaverse’ refers to a shared virtual environment that users can access via augmented and virtual reality, blockchain, and social media technologies. The company asserts that it’ll let people share immersive experiences together – across entertainment, gaming, fitness, work, education, and commerce – even when they can’t be together in the physical world.

Following the announcement, Meta’s stock price rose by 1% in pre-market trading after gaining more than 4.3% the previous day, suggesting that investor sentiment towards the business improved. Although the company has rebranded, its corporate structure remains the same and the company still reports on its two main operating segments.