Facebook’s ad rebound gives Meta CEO Mark Zuckerberg freedom to pursue far-out bets
Meta CEO Mark Zuckerberg demonstrates an Oculus Rift virtual reality (VR) headset and Oculus Touch controllers during the Oculus Connect 3 event in San Jose, California, U.S., on Thursday, Oct. 6, 2016.
David Paul Morris | Bloomberg | Getty Images
Meta CEO Mark Zuckerberg is once again a fan favorite on Wall Street. The same can’t be said for Snap CEO Evan Spiegel.
Both companies were hammered by Apple’s iOS privacy change in late 2021 and the broader economic tumult last year, spotlighted by soaring inflation, rising interest rates and the war in Ukraine. Their ad businesses shrank and investors bailed. Mass layoffs ensued.
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But in consecutive days this week the stark contrast between the two companies has become more clear than ever. Snap shares sank 14% on Wednesday after issuing a disappointing forecast the prior afternoon. Meta’s stock jumped almost 7% in extended trading on Wednesday following better-than-expected results, a return to double-digit growth and rosy guidance for the third quarter.
Meta shares are now up more than 160% for the year. Snap is up 20%, about inline with the S&P 500.
Neither Zuckerberg nor Spiegel have plans to cut back on spending money on experimental projects. Meta is burning billions of dollars a quarter on the futuristic metaverse, and Snap is pouring cash into augmented reality products and services. Both are heavily touting the benefits of artificial intelligence.
The difference is that Meta has rightsized its finances. While Snap’s revenue dropped 4% in the second quarter, Meta is solidly growing again, driven by Facebook’s ad business.
Meta Chief Financial Officer Susan Li told analysts on the company’s earnings call that advertising revenue rose in part due to an increase in spending by online retailers and Chinese companies, continuing a trend from the previous quarter.
Li also said online advertisers are adopting Meta’s Advantage+ service, which analysts have said is helping the company improve the effectiveness of its ad system following the iOS privacy change.
“We’re seeing this work translate into results for advertisers as conversion growth remains strong in Q2,” Li said.
Even with the ad rebound, analysts questioned Zuckerberg on the earnings call about the business rationale for investing in the metaverse, and expressed concern about growing losses in the company’s Reality Labs unit.
Zuckerberg’s pitch for the company’s metaverse investment — which inspired the name change to Meta in 2021 — continues to center around the idea that the company needs to own a platform. Apple has iOS, Google has Android and Facebook has always been forced to play by their rules in order to get distribution for its apps, which include Instagram and WhatsApp.
The metaverse is the place where Zuckerberg sees that dynamic changing. However, he has said it could take a decade and told analysts on Wednesday that he “can’t guarantee you that I’m going to be right about this bet.”
“I do think that this is the direction that the world is going in,” Zuckerberg said. “One billion or two billion people have glasses today; I think in the future, they’re all going to be smart glasses.”
Meanwhile, Spiegel pitched Snap’s AR projects as a “long-term focused” investment that represents “an extension of our core platform rather than totally new bets.”
An analyst on Tuesday asked Spiegel whether the company has “a lot of employees that are working on like five-plus year projects that are not generating revenue,” underscoring the general concern that Snap is spending too much time and investment on the future rather than resolving immediate financial concerns.
And while Meta has seemingly fixed most of its ad problems, Snap is still struggling.
“Profitability is being particularly impacted by a major step up in infrastructure spending as Snap invests in AI both to enhance the user experience and also attempt to improve ad targeting capabilities,” wrote James Cordwell, an analyst at Atlantic Equities, in a note to clients. As a “subscale platform,” Cordwell said he’s skeptical of Snap’s ability to succeed in those areas while “still delivering attractive returns to investors.”
Technology
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Omar Marques | Sopa Images | Lightrocket | Getty Images
EToro, a stock brokerage platform that’s been ramping up in crypto, has priced its IPO at $52 a share, as the company prepares to test the market’s appetite for new offerings.
The Israel-based company raised nearly $310 million, selling nearly 6 million shares in a deal that values the business at about $4.2 billion. The company had planned to sell shares at $46 to $50 each. Another almost 6 million shares are being sold by existing investors.
IPOs looked poised for a rebound when President Donald Trump returned to the White House in January after a prolonged drought spurred by rising interest rates and inflationary concerns. CoreWeave’s March debut was a welcome sign for IPO hopefuls such as eToro, online lender Klarna and ticket reseller StubHub.
But tariff uncertainty temporarily stalled those plans. The retail trading platform filed for an initial public offering in March, but shelved plans as rising tariff uncertainty rattled markets. Klarna and StubHub did the same.
EToro’s Nasdaq debut, under ticker symbol ETOR, may indicate whether the public market is ready to take on risk. Digital physical therapy company Hinge Health has started its IPO roadshow, and said in a filing on Tuesday that it plans to raise up to $437 million in its upcoming offering. Also on Tuesday, fintech company Chime filed its prospectus with the SEC.
Another trading app, Webull, merged with a special-purpose acquisition company in April.
Founded in 2007 by brothers Yoni and Ronen Assia along with David Ring, eToro competes with the likes of Robinhood and makes money through fees related to trading, including spreads on buy and sell orders, and non-trading activities such as withdrawals and currency conversion.
Net income jumped almost thirteenfold last year to $192.4 million from $15.3 million a year earlier. The company has been ramping up its crypto business, with revenue from cryptoassets more than tripling to over $12 million in 2024. One-quarter of its net trading contribution last year came from crypto, up from 10% the prior year.
This isn’t eToro’s first attempt at going public. In 2022, the company scrapped plans to hit the market through a merger with a special purpose acquisition company (SPAC) during a sharp downturn in equity markets. The deal would have valued the company at more than $10 billion.
CEO Yoni Assia told CNBC early last year that eToro was still aiming for a market debut but “evaluating the right opportunity” as it was building relationships with exchanges, including the Nasdaq.
“We definitely are eyeing the public markets,” he said at the time. “I definitely see us becoming eventually a public company.”
EToro said in its prospectus that BlackRock had expressed interest in buying $100 million in shares at the IPO price. The company said it planned to sell 5 million shares in the offering, with existing investors and executives selling another 5 million.
Underwriters for the deal include Goldman Sachs, Jefferies and UBS.
— CNBC’s Ryan Browne and Jordan Novet contributed reporting
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Klay Thompson #31 of the Dallas Mavericks handles the ball during the game against the Memphis Grizzlies during the 2025 SoFi Play-In Tournament on April 18, 2025 at FedExForum in Memphis, Tennessee.
Joe Murphy | National Basketball Association | Getty Images
Chime Financial paid the NBA’s Dallas Mavericks roughly $33 million over three years to have its logo worn as a patch on player jerseys, the company disclosed in its IPO filing Tuesday.
The Mavericks finalized the jersey deal, along with “certain other sponsorship and promotional rights,” in 2020, but terms weren’t announced. CNBC reported at the time that, citing an NBA official, that the league’s patch sponsorships ranged from $2 million to $20 million per season, depending on market size.
Chime, a San Francisco-based fintech company that provides online banking services like direct deposit and credit cards, plans to soon debut on the Nasdaq. Cynthia Marshall, who was CEO for the Mavericks from 2018 until December of last year, is on Chime’s board, so the company included details of the arrangement in the related party transactions section of its filing.
The company said it paid the Mavericks $10.5 million in 2022, $11.5 million in 2023 and $11.2 million last year.
Marshall told CNBC in 2020 that the decision to select Chime for its jersey patch came as the team was looking to fill its official sponsorship slot, which came with the deal. The logo has been displayed around American Airlines Center, where the Mavericks play their home games.
“We wanted somebody that was doing well as a business and growing,” Marshall said. “It’s a perfect fit.”
Chime’s IPO filing lands a day after the Mavericks shocked the NBA world by winning the draft lottery and the right to draft presumed top pick Cooper Flagg from Duke University. The Mavericks had only a 1.8% chance of landing the top pick based on where they finished in the standings. ESPN reported on Wednesday that the Mavericks plan to draft Flagg and are not considering the possibility of trading him.
It was a remarkably fortuitous turn of events for a front office and ownership team that’s been roundly criticized for months since trading franchise cornerstone Luka Doncic in February, bringing back older star Anthony Davis in return.
Longtime owner Mark Cuban sold a majority stake in the Mavericks in 2023 to casino owner Miriam Adelson and her family.
In October, the Mavericks announced a multi-year extension to its Chime deal, agreeing to showcase the brand and the company’s products more broadly. One new aspect was the creation of Chime Lane, “a dedicated entrance featuring exclusive benefits for Chime members during Mavs games and select events at AAC,” the team said in a press release.
— CNBC’s Jordan Novet contributed to this report.
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