Why I'm Investing in Meta

Why I'm Investing in Meta

Meta Platforms is a social media company that operates Facebook, Instagram and WhatsApp. The company’s stock price fell sharply earlier this year as the economic downturn reduced ad sales on Facebook and Instagram. As the reckless investment in Metaverse was highlighted, the share price fell more sharply from the second quarter than before. In the third quarter, the stock price plummeted as net profit faltered, and as a result, the stock price has fallen more than 73% this year.

Many investors believe that the company’s investment in Metaverse is overdone. However, Mark Zuckerberg says that Meta continues to invest because they are investing in the future of the company. I am positive about the future of Meta. What Meta can do now is invest in the metaverse, and we believe that Meta, led by Mark Zuckerberg, will succeed in the future metaverse market.

In this article, I will explain why I like Meta. It’s just a personal opinion, so I hope you’ll only use it as a reference for your investment and don’t think you’ll get more than that. If you disagree with my opinion, please leave a comment so that a lively discussion can take place. I like to discuss with other people, so I would appreciate it if you actively comment.

1. The Earth Moves into the Metaverse Era

Advances in technology have made the world a better place to live. One undeniable fact is that humans have and will continue to advance society rapidly through technological advances. In the days when computers did not exist, humans could do calculations with their brains, but computers made for military purposes can no longer use human abilities. Furthermore, with the spread of computers (PCs) to all individuals, work efficiency has increased.

With the advancement of technology, military computers have evolved into personal computers, and personal computers have evolved into laptops. Smartphones have now reached a level that can replace laptops, and all tasks can be done with just one smartphone. Of course, there is still not enough work to do as detailed as a laptop, but it’s not impossible.

What’s next for smartphones? I think it’s a metaverse. Current VR headsets are not suitable for portable use due to their large size and heavy weight, but it is clear that they will become as portable as smartphones if miniaturization proceeds through technological advances in the future. The most active company in this field is Meta Platforms. So I agree with this Meta and Mark Zuckerberg’s thoughts.

Apple was the fastest growing company in the smartphone world. And Samsung Electronics, which designs and makes smartphones, and Google and Facebook, which build the mobile ecosystem, have also grown rapidly. Without smartphones, these companies would not have been able to grow so quickly. I think virtual reality is an inevitable future, and I think positively about the business direction of Meta, which is making the most advanced hardware in the virtual reality market and building a communication ecosystem.

2. Unbreakable Facebook and Instagram

Although Facebook is an old social platform, it is still used by hundreds of millions of people. In addition, Instagram is the most popular social app among the young generation in their 20s and 30s. Some people question the growth potential of Meta by explaining that Facebook’s influence has greatly decreased, but I have a slightly different view. While Facebook users aren’t as loyal as they used to be, the amount of data Facebook has created over the past decade cannot be ignored. It is positive that Meta can use this to expand its business.

In particular, attracting new customers is one of the most difficult tasks for startups. Meta does not need to spend a lot of effort to build a new ecosystem. Of course, building a new ecosystem is not easy, but it does mean that it is easier to set up an ecosystem than other startups.

When Meta Quest 2 was first released, the Oculus ecosystem required a Facebook account, but now requires a unified Meta account. This means that Meta is building an ecosystem in which Facebook, Instagram, and virtual reality are integrated. If Meta brings Facebook and Instagram users into virtual reality, Meta will be able to quickly and significantly grow their virtual reality service (Meta Horizon World).

3. Unique Virtual Reality Ecosystem – Meta Horizon World

In the past, there were people who criticized Mark Zuckerberg for buying Oculus at an excessive price. However, in a world where virtual reality replaces smartphones, it is clear that Oculus will be the business segment that will bring the biggest returns to Meta. The reason Meta is investing huge amounts of money in virtual reality and artificial intelligence is because Oculus has unlimited growth potential, and this is possible because it has a consistent goal of establishing a virtual reality ecosystem.

Oculus merged with Reality Labs and became an integral part of Meta. The name Oculus is no longer used. Now only the trademark Meta is used. Oculus Quest has also been renamed to Meta Quest.

Meta Horizon World, ambitiously unveiled by Meta, is set to become a true replica of the real world, where you can chat with friends, shop and play games in virtual reality. Owning text-centric Facebook, photo-centric Instagram, and the messenger WhatsApp, Meta is designing an all-new platform that integrates everything.

The advantage of the Meta Quest series is that it has its own app store. You can also use the game distribution platform Steam, but Meta Quest allows you to download games and other content from the App Store. Therefore, Meta Quest is called a standalone product. At that time, Facebook released the Oculus Quest 2 at a price of $299 even though a large loss was expected. VR game enthusiasts cheered. Although Facebook expected a loss, the company lowered the price of its product because it was aimed at expanding the virtual reality ecosystem.

With this strategy, Meta has become the most influential virtual reality company, accounting for over 70% of the global virtual reality headset market share. The company, which owns the virtual reality ecosystem and also operates social media, has succeeded in creating an environment for conducting various businesses in this new world.

4. Valuation

This article contains my thoughts on Meta. After reading this article, there will be people who invest in Meta, and there will be people who disagree with my opinion. But no matter what anyone says, my opinion will not change, and it is clear that Meta will become a company that exerts as much influence in the virtual reality market as it is now Apple. Apple, Microsoft, Google, etc. are also designing VR and AR headsets and glasses, but it is true that Meta, which entered this business one step ahead, has more options.

Investing in Meta from a long-term perspective is not a bad decision. However, if you are looking for short-term returns, do not invest. Meta will have to invest billions of dollars in the Metaverse over the next few years. So, in the next few years, Meta Platforms (META) stock price will be weak.

But in 10 years, Meta will most likely be the largest company in the world.

Original text: 내가 메타(Meta Flatforms)에 주목하는 이유

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