FB changes its name to Meta and the stock ticker to MVRS. What does this mean for investors?
Facebook (FB) surprised many investors at Thursday’s Facebook Connect Augmented and virtual reality conference by announcing its rebranding and changing its world-famous name to Meta.
Facebook also announced that from December 1, 2021, it would change its stock ticker on the exchange from FB to MRS.
What does Facebook’s “Metaverse” mean?
Facebook CEO Mark Zuckerberg believes that “the metaverse will be the successor to the mobile Internet” and a new way for people to communicate, find communities and develop businesses.
Facebook plans to use augmented reality glasses, phones, computers, and AR and VR technologies.
At the same time, Zuckerberg said that they would develop many technologies for a long time, and elements of the metaverse will potentially become mainstream in 5-10 years.
At its conference, Facebook also announced a new virtual reality headset called Project Aria at a higher price than the Quest 2 headset for $299. According to Zuckerberg, Project Aria will take next year.
Market analysts noted the erroneous haste of some investors who on Thursday purchased shares of a company with a similar name – Meta Materials (MMAT).
After trading on Thursday, shares of Meta Materials, a Canadian materials company that has nothing to do with Facebook, rose 25%.
A similar situation occurred in April 2019, when the shares of the tiny Chinese wireless communications company Zoom Technologies rose by more than 80% after Zoom Video Communications (ZM), a popular video chat application, entered Nasdaq.
What does it mean to change the name of Facebook to Meta?
By changing its name to Meta, Facebook wants to be perceived not only as a social media application company. So, in its financial report on Tuesday, the company said that it would allocate Facebook Reality Labs (FRL), its AR, VR division, to a separate reporting segment.
An example from Google immediately comes to mind – when in 2015, the largest Internet giant company decided to change its name to Alphabet (GOOGL, GOOG), as it expanded its business into cloud computing, gadget manufacturing, investing in startups, etc. Google today is a subsidiary of Alphabet, which receives income mainly from digital advertising.
It emphasizes that the company was more than just a search engine, although the Google brand still has much more recognition.
Is Facebook rebranding an attempt to get away from the scandal? Expert opinion
However, most analysts and marketers tend to believe that this is an attempt by Facebook to create news that distracts attention from the scandal with the leak of internal documents of the company.
On September 14, a Wall Street Journal article in which a former Facebook employee Frances Haugen provided the results of research conducted by companies that prove the detrimental effect of company applications on the psyche of young people and confirm the fact of the gradual loss of a young audience in favor of competitors.
Since then, Facebook shares have fallen more than 17% and continued to fall after Tuesday’s financial report.
Mike Davis, president of the Internet Accountability Project, which opposes monopolists among the largest technology companies and calls them to account for their evil actions, cited a parallel with cigarette manufacturer Philip Morris, which changed its name to Altria (MO) in 2003.
Marketing professor at Georgetown University’s McDonough School of Business said Facebook’s new name could help him create psychological distance from his consumer problems. However, he was skeptical about the effectiveness of this strategy.
