As you might imagine after reading the above, Meta, the company, is in a super interesting place right now.

As we have covered, the stock is in the tank. It is down over 50% this year and over 55% from its all time peak in 2021.

This terrible performance can somewhat obscure just how ubiquitous and, even, dominant the company is around the globe.

From the omnipresence of WhatsApp for communication to the power of Instagram for brands to the fact that even your grandparents have Facebook, Meta is everywhere.

This size and reach can get lost in both the criticism and the endless noise around a company that nearly all of us use.

Here is one data point among many that can help remind you:

• Its ad business generated $11 billion last quarter.

• That sounds pretty impressive until you realize it was $15 billion in the second quarter of 2021.

Shrinking revenues is not a great sign and it is not as if that is the only storm cloud facing the company.

Meta is also a rare source of bipartisan agreement in Washington. It is unpopular on both sides of the political aisle (though for different reasons), but regardlessly, that is quite a feat in this day and age.

Continued political pressure combined with regulatory action and deep reservoirs of public anger and disillusionment is a tough to be for any company.

But all of these threats are, in some ways, secondary.

The real problem with Meta is, most likely, rooted in the name change from Facebook to "Meta." That shift reveals some of the current priorities in the company. It also underlines some of the risks. And while they absolutely could pay off over the long term, they are simply not a sure thing. That makes many investors either nervous or simply unwilling to go along for the wild ride.

In practical terms, there is simply the fact that Facebook/Meta is spending A LOT of money on its transformation from social media juggernaut to dominant provider of services in the Metaverse.

Add it all up and the company is spending over $1 billion dollars a quarter on a very big and very risky bet - one that is very difficult to handicap one way or another.

And the early signs on the bet are, to put it kindly, very underwhelming. Here is a still shot from a recent demo of Meta's Horizon Worlds opening up in parts of Europe:​

This seems, not stupendous......?

We are no great design gurus over here but this looks like something out of a video game from the 1990s.

Nintendo 64 called, they want their Eiffel Tower back.

Where this gets very serious is when Meta's earnings come out and a close reading reveals that they spent $10 billion with a capital "B" on the Metaverse in 2021. If the above image is the output from that expenditure and the fact that they are rolling out products in non-English markets with English as the dominant language then it is hardly surprising that even patient, long term investors are taking fright.

The Metaverse gamble creates deep uncertainty around the company's prospects and creates the risk that, as we wrote last November, "Facebook becomes Facesmash." Re-reading our work this past week we were struck by how careful we were about detailing just how such a fall could be in Facebook/Meta's future.

Anyway, this is the situation at Meta and it doesn't look like it will change any time soon. Growth of users is slowing as is advertising revenue while the company is plowing billions and billions into a new project that, at least based on the early evidence, is unlikely to take the world by storm as it did once with its core social media platform.

Wasteful spending on a white elephant isn't the only threat either. There is another social media company that could be said to be beating Meta at its core business:

TikTok has none of Meta's problems in terms of either user interest:

Or making money:

Better to be shiny and new (and fast growing) than large and profitable and old hat. Shiny new syndrome is a real syndrome for a reason….

Based on the above, Meta may continue to be very large and very profitable but it will unlikely reach the previous heights of its stock price, let alone the relative size versus its peers, if this continues.

And spending billions of profits while the core business shrinks is a tough recipe for most investors to swallow.

The shift in name from Facebook to Meta is telling but the shift in profits isn't there yet. Until it becomes clearer, the company's share price will be challenged.

Meta isn't the only place struggling with a shift, of course. Time for our update on the crisis bedeviling one of Europe's most important economies.

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