The Commercial Real Estate Alpha Site

“I believe we are deeply underestimated as a company today. Billions of people use our services to connect, and our communities keep growing.”

– Mark Zuckerberg

01

Meta Lays Off over 11,000 Employees

After a disappointing earrings print, Mark Zuckerberg’s company is laying off over 11,000 employees, or roughly 13% of its global workforce,  in an effort to control costs. The company’s considerable investment in the Metaverse has concerned Wall Street investors, while growth in its flagship product  Facebook has stalled as TikTok takes market share.

Titan’s Takeaway

Patience is wearing thin for Zuckerberg and his Metaverse. A name change is one thing, but pouring billions of dollars into a void as the cost of capital increases won’t make Wall Street tap the like button.

02  Disney Disappoints Disney reported mixed results in its latest earnings report showing mounting streaming losses and sending its stock spiraling down. While Disney+  added 12.1 million net new accounts, losses in the overall streaming unit ballooned to $1.47 billion. Despite the bearish streaming numbers, its theme park business reported a 36% increase in revenue.  Titan’s Takeaway Disney is caught in the crosshairs of the streaming slowdown, but it appears we are closer to an earnings inflection point with material direct-to-consumer profitability improvements. If Disney can illustrate signs of reaching its FY24 goals, the scales could tip, and positive sentiment may follow suit.

03 Redfin Lays Off 13% of Employees The real estate company slashed its workforce by 13% and shutters its home-flipping unit as rising rates continue to batter a new cohort of real-estate tech upstarts. Redfin’s home-flipping business amounted to 34% of the company’s revenue. Redfin’s furlough follows Opendoor Technologies posting record losses last week.  Titan’s Takeaway The housing market has slowed significantly this year as higher interest rates are making buying a home more expensive for would-be homeowners. Home-flipping is particularly sensitive to the rising rate environment as the investments tend to be of shorter duration and more speculative in nature. While home prices will eventually stabilize, capital costs will likely remain elevated for some time.