Finimize - 📉 Meta: new name, same problems

Hi Reader, here's what you need to know for February 3rd in 3:13 minutes.

🌾 There are a lot of crypto projects out there to choose from – too many, if anything. So join blockchain consultant Shiv Mehta for How To Manage A Digital Portfolio on Friday, and get the lowdown on how to sort the wheat from the chaff. Get your free ticket

Today's big stories

Investors weren't impressed by Meta's lackluster earnings report
The collapse of one relatively small crypto project last week just exposed a big flaw in the overall market – Read Now
PayPal announced a poor set of results, and it's not got high hopes for 2022 either

Identity Crisis

What’s Going On Here?

Meta’s stock plummeted after it posted disappointing results late on Wednesday, suggesting investors aren’t exactly convinced by Facebook’s new look.

What Does This Mean?

Meta makes most of its money by selling its users’ attention to advertisers, and it did reliably well on that front: ad revenue ticked up by a better-than-expected 20% compared to the same time in 2020. Likewise, revenue from its Reality Labs segment – where the metaverse magic happens – was up 22%. So far, so good.

Then again, there were fewer eyeballs on its platforms than analysts were expecting: the number of Meta’s monthly active users grew by a weaker-than-expected 9%. Its outlook for this quarter wasn’t what anyone had hoped for either, with Meta warning that inflation and supply shortages would take their toll on advertisers’ budgets. That didn’t go down well: its shares initially plunged 22%.

Why Should I Care?

For markets: New name, same problems.
Meta’s Reality Labs is growing, sure, but the segment still posted a $3 billion-plus loss last quarter. And Meta hasn’t exactly filled investors with confidence that it can pull off its more ambitious enterprises: the company’s most recent moonshot – a bid to launch its own cryptocurrency – ended with a whimper this week after regulatory pushback drove the company to scrap the plan altogether.

The bigger picture: NFTs FTW.
You’re much more to Meta than just a walking, talking data point it can sell onto advertisers for a quick buck, you know: you’re a walking, talking cash piñata too. It emerged late last month that the company’s working on features across Facebook and Instagram that would allow you to mint your own NFTs, and it’s even reportedly discussed a marketplace where you can buy and sell them too. That’s one cash cow the company has left unmilked up to now, which could be udderly short-sighted: investment bank Jefferies thinks the NFT market could double to $80 billion by 2025.

You might also like: How to actually make money from NFTs.

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Analyst Take

The Crypto Market Might Be Flawed

Reda, Analyst

What’s Going On Here?

If you’ve never heard of Wonderland, let’s get you up to speed.

Wonderland was founded last year by prolific crypto developer Daniele Sestagalli and the pseudonymous Sifu, who also manages the project’s $700 million-plus treasury.

But when it emerged last week that Sifu is really a convicted felon for identity theft and credit card fraud, investors abandoned the project in their droves.

Wonderland’s native token dropped more than 40% in a matter of hours, meaning it’s now 97% below its all-time high.

That then spread like wildfire: MIM, UST, LUNA, and plenty of other acronyms felt the knock-on effects in a way that exposed just how vulnerable the crypto market is to contagion.

So that’s today’s Insight: the full story of how the collapse of Wonderland exposed the biggest flaw of the crypto market, and what you can learn from the sorry saga.

Read or listen to the Insight here

Breakfast with a side of NFTs

Good coffee shops in the UK are a dime a dozen.

Really great coffee shops, though, are something special – and then there’s the one that sells NFTs along with their flat whites.

We’re talking about Black Sheep Coffee: the British favorite where commuters can admire some unique street art while grabbing their morning dose of freshly ground coffee.

But you don’t have to be passing by to get your art fix: Black Sheep just dropped its exclusive NFT collection on Opensea.

And when we say “just”, we mean it: the collection went live today.

They’re selling faster than Black Sheep’s fresh croissants, so don’t miss your chance to grab one.

Wake Up To NFTs