The idea of a parallel world, i.e. a universe outside the one we know, has hardly been better illustrated than by the science fiction adventure "Matrix", released in 1999. In the film by the legendary Wachowski brothers, the supposed reality is merely a computer simulation. A world within a world, created only from 0 and 1, is now within reach two decades later. Metaverse is the name of this virtual reality, in which a social as well as economic life can be led synchronously.
The first offshoots of this movement have already been seen in the gaming sector, such as in the box office hit "Fortnite", where users buy their own costumes, or on the gaming platform "Roblox", where people are happy to shell out real money for digital objects. Now, however, a powerful and well-funded tech company has given the irrefutable go-ahead for the three-dimensional virtual space. We are talking about Facebook. That the social network is serious about this is shown by the recent announcement to change its own name to Meta Platforms. According to founder and CEO Mark Zuckerberg, it's not just the company's name that's being transformed; the change of name is also accompanied by a change in strategy. The billionaire, who is only 37 years old, wants nothing less than to write the next chapter of the Internet.
Retrospect: The Havard graduate has already succeeded once in revolutionizing the World Wide Web. On February 4, 2004, the computer scientist put an open and networked world online for all Harvard students. The platform was not only well received by the university students, but triggered a worldwide phenomenon. Today, Facebook boasts a staggering 2.91 billion monthly active users, giving it a reach unlike any other company. However, Facebook's dominance is now a thorn in the side of some authorities. In the USA, there are calls for the online giant to be broken up, and here in Germany, the company is the subject of debate due to constant data protection problems. Facebook has already had to pay out billions in the past due to violations.
However, even courts have not been able to stop the company's growth trajectory to date. In the five years between 2016 and 2020 alone, sales and profits have roughly tripled. The group is also continuing its success story in the current year. In the three months from July to September, the world's largest social network took in USD 29.01 billion, 35% more than in the same period last year. Earnings per share climbed 17% to USD 3.22 in the same period, which was even more than the USD 3.19 expected by analysts on average. However, Facebook caused a small disappointment in terms of revenue - both with the Q3 figures and with the outlook. Zuckerberg blames Apple's privacy rule changes, which make personalized advertising more difficult, for the cautious forecast.
With billions invested in the aforementioned Metaverse, the company wants to prevent its growth story from faltering. The new online worlds are supposed to offer everything that makes the user's, and of course Facebook's, heart beat faster. Equipped with virtual reality glasses from the company's own brand Oculus, users can purchase digital objects ranging from clothing to accessories to real estate as 3D avatars in strange worlds. CEO Zuckerberg talks about a goal of one billion users moving and interacting in the Metaverse - and ultimately filling the company's coffers.
It is likely to be a few years before this augmented reality becomes an actual one. However, Facebook could once again have the right nose and be ahead of the game in the search for the "Next Big Thing". Star investor Cathie Wood of ARK Invest reacted immediately after the rebrand and bought shares of Meta Platforms for USD 91.2 million in the same week. In general, buying is predominant at the moment and the tech stock is starting to rebound after weeks of losses. The stock is supported by the 200-day line, which protects the price on the downside. The next target for the bulls is to overcome the short-term downtrend. Currently, Meta is still trading just under 15% away from its all-time high at USD 384.33.
For the new Callable Barrier Reverse Convertible, however, it does not matter whether the Meta share is now chasing the peak. The products come with risk buffers of 31%, which in turn means a barrier in the USD 227 range. The threshold is thus at a level below the low for the year. The BRCs are available in two currency tranches: USD and CHF. In terms of coupon, the USD version is ahead with 10.00% p.a.. However, at 9.00% p.a., the CHF product also offers only a slightly lower potential return.
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