Facebook's metacurse

Delivered on By Justin Pyvis

Good morning! Is the pandemic already over? The answer depends on where you look.

Take Europe, where countries such as Denmark have moved on and removed all restrictions, declaring COVID-19 “no longer poses a threat to society”.

But just 1,000 kilometres to the south you’ll find Austria, where bars and clubs remain closed, cafes and restaurants have curfews, and earlier this week a new law was passed permitting police to conduct spot checks and issue 600 euro fines to anyone unvaccinated. The law will remain in place until at least 31 January 2024.

In Australia we have incredible disparity within the same country, with the eastern seaboard living with the virus while the west remains almost completely isolated from the world.

Either some jurisdictions aren’t willing to consider trade-offs at all, or they’ve failed to update those trade-offs to the reality of widespread vaccination, better treatments and Omicron’s milder effects. Yesterday Australia’s Chief Health Officer Paul Kelly informed us that in Australia:

“The death rate from Omicron is 0.1%: 99.9% of people who get Omicron survive, and usually survive well, without ongoing problems… There are issues with other longer-term effects but the reality is the death rate from Omicron [is] 0.1%… we have a spectacularly low rate of death.”

Health Minister Greg Hunt then went on to add that of the unfortunate 0.1% that succumbed to Omicron, 61% were already in “palliative conditions”.

That’s good news. If Omicron is the last wave of the pandemic and we’re not dealing with a more severe Pi, Rho or even Sigma in a few months, it’s great news.

Reading the tea leaves

Daily % change







AU Bond



US Bond









Brent (bbl)



Gold (oz)



Iron ore (t)









Note: Brent oil, gold bullion and iron ore prices are the second futures contract. Bond yields are 10-year Treasuries. The S&P500 is a snapshot 30 minutes before close.

At the time of writing the US S&P500 was down -2.0% after Facebook’s parent company Meta was obliterated for releasing an extremely soft earnings report. A fall in US initial jobless claims was not enough to swing sentiment the other way, with all eyes now on Amazon which will report after the bell today.

Locally, the ASX200 fell 0.14% as tech was massacred (-5.9%) following a series of horror earnings reports in the US by Meta (see Food for thought below), PayPal and Spotify.

Food for thought

At least for now, the 'metaverse' is burning serious cash.
At least for now, the 'metaverse' is burning serious cash. Source

The artist formerly known as Facebook, Meta, instantly plunged over 20% – or about one New Zealand worth of value (~$US200 billion) – in after hours trading on Wednesday after reporting disappointing December quarter earnings, along with a first ever decline in daily active users on its flagship Facebook app and virtually no growth anywhere else. With 30 minutes of regular trading left today, Meta was trading down 26.9%.

The slowdown in Meta’s revenue growth was attributed to Apple’s recent privacy moves (-$US10 billion this year) and people’s growing preference for short-form videos (Reels, a TikTok clone), which face intense competition and don’t generate as much advertising revenue as the company’s News Feed or Stories products.

Those issues led Meta to issue a March quarter revenue growth outlook so slow (3-11%) that you’d be forgiven if you mistook it for an old-school, infrastructure-heavy utility as opposed to a tech company.

  • Tech companies generally trade on large revenue multiples, so if their future earnings are no longer expected to materialise, their share prices have to fall.

But it wasn’t all about revenue. Another concern for investors was on the cost side, where for the first time Meta divulged the results from its ‘metaverse’ investments, including things like virtual-reality goggles, smart glasses and yet-to-be-released products.

Let’s just say it didn’t go down well – the division lost $US10.2 billion on revenue of $US2.3 billion in 2021. If it keeps that up Meta may as well rename its big pivot into the ‘metaverse’ as the ‘metacurse’; that’s certainly how it must already feel to shareholders!

Now to be fair, you have to spend money to make money in a frontier industry. Perhaps that ten billion investment will eventually yield hundreds of billions in revenue.

But you can colour us sceptical; we can’t imagine much worse than being trapped in a virtual world controlled by Mark Zuckerberg. As we wrote back when the pivot was announced in November:

“…a metaverse built by Facebook sounds like a living nightmare to us. Virtual offices, meetings, gatherings that you can’t escape, all under the watchful eye of Mark Zuckerberg who will ensure it’s overflowing with product placements to help pay for it all (or a hefty monthly subscription).”

Good luck to the Zuck, he’s gonna need it.

Bits and bytes

😷 Last financial year the NSW government spent $158.8 million on face masks that were unable to be used, part of $775.8 million in spending on health equipment that “was either written off or impaired”.

🥝 New Zealand will gradually reopen to the world from 27 February with Kiwis in Australia the first to be allowed in, followed by Kiwis anywhere (13 March), students and skilled visa holders in April, visa-waiver countries such as Australia “no-later than July”, then everyone from October.

😲 There must be an election coming up or something. Asked whether WA Premier Mark McGowan did the right thing by indefinitely delaying the state’s reopening, ScoMo said “Yeah, I think he did.”

⛵ Australian officials claim the ship British explorer James Cook sailed to Australia, the Endeavour, has been found near Newport Harbor, Rhode Island. However, the Rhode Island Marine Archaeology Project subsequently said the announcement was “premature”.

🏡 Stimmy fade – Australian “house approvals remained subdued, falling 1.8% in December, following a 1.6% decline in November”, although remain “at historically elevated levels”.

📈 One day after RBA governor Philip Lowe held firm on rates, Australia’s largest bank the CBA lifted its fixed term mortgage rates by between 5 and 20 basis points, the fourth increase since November.

🏦 The Bank of England raised its cash rate by 25 basis points for the second time in three months amidst “increasing signs of broader price pressures across the economy”.

⚠️ 3,000 US troops were deployed to Poland, Germany and Romania “in a move to bolster NATO countries in Eastern Europe with tens of thousands of Russian troops amassed along Ukraine’s border”.

🍻 UK Prime Minister “is coming under fresh pressure as three Tory MPs join efforts to oust him as prime minister… amid the ongoing row over lockdown parties in No 10”.

💉 Germany’s expert panel on vaccine use will soon recommend a fourth COVID-19 vaccine dose, as it “significantly improves protection from a severe case of illness”.

🦠 The US CDC reported that “fully vaccinated Americans are 14 times less likely to die of COVID-19 than those who haven’t gotten the shots. Boosted Americans are 97 times less likely.”

🔬 A new study based on a world-first human challenge trial using the original COVID-19 strain found that “people started to develop symptoms and become infectious to others after just two days, much quicker than expected… Participants remained infectious for an average of nine days and a maximum of 12 days after exposure”.

🔥 Time for Erdogan to fire another statistician. Turkey’s consumer prices rose by 48.7% in January, the most since 2002.

⚱️ Chris Silverwood resigned as England’s cricket coach, becoming the second member of the coaching staff to walk following the disastrous Ashes campaign. Earlier this week Ashley Giles, England’s director of cricket, stood down.

🦗 Australia retained the women’s Ashes after a 27-run victory in the first of three ODIs, meaning the best England can do is draw the series.

🔌 Tesla is recalling another 817,000 vehicles due to a software error in its “seat belt chime functionality”.