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How’s Meta doing? Worse.
Good morning! The women in blue finally stand shoulder-to-shoulder with their male counterparts. In a step towards narrowing the gender wage gap, the BCCI announced equal pay-per-match for Indian women cricketers. Their match fees now look like this: ₹15 lakh per Test match, ₹6 lakh per ODI, and ₹3 lakh per T20I. Earlier this year, New Zealand Cricket had announced a historic equal pay deal. Hopefully, more sports bodies take this as a sign to pay equal compensation to women–not just per match, but when it comes to central contracts too.
A quick programming note: On account of the festive season, today’s is a short edition. The Intersection will publish curated weekend reads on October 29 (Saturday). The daily edition will resume on October 31 (Monday).
The Market Signal*
Stocks: US investors were spooked by disappointing Big Tech results and Credit Suisse teetering on the brink of collapse. The Swiss bank said it would lay off thousands of staff and sell off pieces of its business. It is also knocking on the doors of Saudi investors to raise capital.
Business Standard reported heavy withdrawals from mutual funds’ systematic investment plans, indicating retail investors dipping into savings to spend during the festival season.
Early Asia: The SGX Nifty climbed 0.26% at 7.30 am India time. The Hang Seng Index (-0.20%) and Nikkei 225 (-0.41%) crawled downwards.
TECH
Meta’s Worst Wednesday
Where do we even start? Meta, the company formerly known as Facebook, had a woeful Wednesday. Its shares tanked ~20%, the lowest since 2016, on the back of disappointing Q3 results. That said, its second-highest quarterly revenue decline (ever) did not stop Mark Zuckerberg from going all-in on the metaverse.
Numbers, please: A 4% year-on-year drop in revenue and a 52% year-on-year drop in profit (net income). The bright spot was 140 billion daily plays on Reels (on both Facebook and Instagram), a 50% increase from six months ago.
Reality bites: Just this week, Meta shareholder Altimeter Capital had sounded the bugle in an open letter: cut the flab and spend less on the failing metaverse. The advice has fallen on (Zuck’s) deaf ears for now.
The meltdown: A drop of over $65 billion in Meta’s valuation, with the stock slumping ~70% from its 2021 high before the rebranding.
The Signal
Meta’s struggles are symptomatic of the broader patterns in big technology companies’ ad-fuelled model. Ask Evan Spiegel and Snap. Or Sundar Pichai at Alphabet. Why is that? Rising inflation means advertisers have cut spending.
Sure, Apple’s ad-tracking transparency played its part, and increasing competition from TikTok is a definite squeeze. But Meta’s problems seemingly lie elsewhere. It is burning $15 billion (annualised) on the “future of the internet”, aka the metaverse, for use cases that keep shifting from commerce to work (legs!).
‘To hell with Wall Street’ seems to be Zuck’s battle cry for the moment. Sure enough, we’ll be saying the same thing again in January. Until then…
🎧 Meta gets a reality check. The Signal Daily is available on Spotify, Apple Podcasts, Amazon Music, and Google Podcasts, or wherever you listen to your podcasts.
FYI
New era? Even as Elon Musk took over Twitter on Thursday, at least four Twitter executives including CEO Parag Agrawal, CFO Ned Segal, legal affairs and policy chief Vijaya Gadde have been asked to leave the building, according to reports.
Line of defence: In a first for a private Indian company, the Tata Group is joining hands with Airbus to locally manufacture 56 Indian Air Force planes in Gujarat.
Alchemy: The Economic Times reports that three “digital asset management companies” are being probed for their role in illicit drug deals worth ₹28,000 crore ($3.4 billion).
Spice route: FMCG major Dabur forayed into India’s branded spice market by acquiring a 51% stake in Badshah Masala for ₹587.52 crore ($71.2 million).
👀: Think & Learn Pvt Ltd, the parent company of Byju’s—which is reportedly laying off about 12,000 employees—raised an unsecured loan of ₹300 crore ($36.4 million) from its subsidiary Aakash Educational Services.
Booster: B2B ecommerce platform Udaan raised $120 million (₹989 crore) in debt and convertible notes in the run up to its IPO, slated for 12-18 months from now.
Game on: TikTok, whose parent ByteDance downsized its gaming unit in China last month, is launching a standalone gaming channel within its shortform video platform.
FWIW
New hands: Thai business tycoon and transgender activist Anne Jakkapong Jakrajutatip now owns the Miss Universe pageant. $20 million (₹164.8 crore) is all it took. Jakrajutatip, a transgender woman, hosts the Thai versions of Shark Tank and Project Runway. But don't expect any revolutionary changes just yet. On the agenda: launch merchandise spanning skincare, cosmetics, dietary supplements, and drinks. Unfortunately, beauty is still skin deep.
Bali’s calling: Bali can soon be your second home, as long as you deposit $130,000 (~₹1crore) in Indonesian banks for a “second home visa”. Indonesia is the latest country aiming for a piece of the tourism economy pie. Starting December 2022, the country is opening up a 10-year visa option for (rich) foreign tourists. Indonesia joins New Zealand, Brazil, and Portugal, which already have similar programs in place to attract remote workers.
Kanye West stands alone?: Not really. In the last month, fashion brands Adidas, Balenciaga, and GAP dropped the rapper from their portfolios following his anti-Semitic remarks. But music companies are in wait-and-watch mode. Spotify has passed the buck to music labels. Sony and Universal, in turn, have denounced the singer for his views. Even if his airtime shrinks, his music catalogue may live on… for the foreseeable future.
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