Is Meta Platforms in face off new problems?

The Meta Platforms company known by its old name, Facebook, could face stacked problems in maintaining high margins by the fall of 2021. A recording of a June 30 closed-door Q&A meeting obtained by Reuters suggests that Mark Zuckerberg expects a massive slowdown:

• Meta Platforms still has an assured place in US Big Tech and remains one of the leading US-based technology companies. The company has so far been known for leapfrogging revenue and the popularity of its social media platforms by making analysts' expectations for its financial results inflated, which ultimately ended in considerable disappointment. The first quarter of 2022 represented the first crack in the company's ever-growing business in many years;
• Although Zuckerberg spoke moderately positively about the company's future performance after the Q1 results he has now likely managed to change his attitude. Information from a June 30 Q&A meeting indicates that Zuckerberg is clearly concerned about the recession and reduced spending by households. A Reuters recording suggests that Zuckerberg expects "one of the worst slowdowns we've seen in recent history."
• The Met intends to cut costs by downsizing. The company wants to hire 6,000 to 7,000 new engineers in 2022, compared to an initial project of 10,000 new positions, Reuters points out. This represents a 30% to 40% adjustment, and confirms that the new tech jobs sector is also currently losing out as a result of the stock market turbulence, Meta being just one of many tech giants that have decided to cut jobs (including Amazon, Microsoft, Tesla, Netflix and Snap);
• The company fears problems with new users due to the war in Ukraine and the suspension of services in the Russian market. The world seems to be once again dividing into two blocs (the US and China), and the hypothetical twilight of globalization hinted at in a spring interview by Black Rock CEO Lawrence Fink may cause US companies to lose consumers in Asia, among other places;
• Mark Zuckerberg, despite the turbulence, is successively orienting the company's core business to the emerging Metaverse trend, and has signaled in the past that all of the company's products will be scalable in virtual worlds. As a result, the company is incurring the huge expenditures that innovative operations require and macroeconomic circumstances are decidedly not conducive to the valuations of companies that accept a risky business profile:
• The company intends to play a key role in the construction of increasingly elaborate and enhanced virtual worlds, where virtual, mixed and augmented reality (VR, MR and AR) technology is being developed;
• The company's Metaverse division is incurring multibillion-dollar costs although the current margin that building VR worlds brings to the company remains negligible relative to the outlay, which worries some investors looking for security. Zuckerberg seems unconcerned about the concerns and is confident in the company's new direction. Major investment funds including BlackRock indicate that the emerging, powerful potential of the Metaverse world and the digital economy being built there remain only a matter of time. 
• Even if the construction of digital worlds turns out to materialize on a huge scale as we are already seeing, for example, as a result of the rise in popularity of Oculus (owned by Meta), by then the company may have weathered a real storm, triggered by aggressive central bank policies, declining investor confidence and still, of course, a hypothetical, painful recession in the US.

Meta Platforms META.US stock, H4 interval. The company's stock price has been in a downtrend since early 2022. We can observe that demand has twice decelerated, forming a local double peak formation near $170, which coincides with the 23.6 Fibonacci retracement. The weak condition of the bulls may prove to be a harbinger of further declines in view of the results season. On the other hand, a demand hit after above-expected results could result in a break of the 23.6 zone and a rebound to the area above the psychological border of $200 and the 61.8 retracement.