To The Moon

The metaverse project is about to undergo unprecedented budget cuts amid the latest strategic shake-up by tech giant $Meta Platforms, Inc.(META)$ . The news triggered a strong reaction from the market, with shares rising more than 6% premarket. According to people familiar with the matter, the metaverse project, which Meta CEO Mark Zuckerberg had high hopes for, is expected to face budget cuts of up to 30% in fiscal year 2026. The cuts involve multiple core products including the virtual world platform "Horizon Worlds" and Quest virtual reality devices. If the budget cuts are as significant as expected, a new wave of layoffs may surface in January next year, but the final plan has not yet been finalized.

This massive cut is a difficult decision made by Meta as it plans its 2026 budget. According to informed sources, the relevant discussions were held at Zuckerberg's home in Hawaii. Zuckerberg is asking for roughly 10% expense cuts across lines of business generally, an approach consistent with budget cycles over the past few years. However, the metaverse unit was required to make further cuts because Meta failed to see the expected competition and market enthusiasm in the industry, and the return on related investment continued to be sluggish.

Since Zuckerberg renamed Facebook Meta in 2021 and made a full bet on metaverse, the company's Reality Labs division (covering VR headsets, AR glasses, and virtual worlds) has lost more than $70 billion in cumulative losses. Although investors had high hopes for this project, investors' confidence in this project is also weakening as the industry as a whole fails to see explosive growth, consumer applications are limited, and issues such as privacy and child safety frequently cause controversy.

Bull Put Spread

1. Strategy structure

Investors Build a on MetaBull Put Spread(Bull Put Spread), consisting of two Put options with the same expiration date:

• Sell a higher strike price Put: K ₂ = 640, US stock premium revenue is US $3.53

• Buy lower strike price Put: K ₁ = 630, US stock premium spend $1.90

The strategy belongs toCredit type, moreCombination of. Investors expect META at expirationUp to $640, the higher the better, thereby retaining the net premium.

Initial net income

Net premium (per share) = Revenue 3.53 − Expense 1.90 =$1.63/Share

1 mouth = 100 strands, therefore:

Total revenue = 1.63 × 100 =$163/contract

This is locked when opening a positionMaximum potential profit。

3. Maximum profit

When META Expiration Price≥ $640At that time, both Put shares were out of the price, and all premium income was retained by investors.

Maximum profit =$163/contract

4. Maximum loss

When META Expiration Price≤ $630At that time, both Put shares are in-the-money and the spread is fully triggered, but investors still retain net income.

Strike spread = 640 − 630 =US $10/share

Maximum loss (per share) = 10 − 1. 63 =$8.37/Share

Total maximum loss = 8.37 × 100 =$837/contract

5. Break-even point

Breakeven = High Strike Price K ₂ − Net Income = 640 − 1.63 =USD 638.37

Maturity judgment rules:

• ≥ $638.37 → Earnings

• = $638.37 → tie

• ≤ US $638.37 → Loss

6. Risk and return characteristics

• Maximum gain: $163/contract (limited)

• Maximum loss: $837/contract (limited)

• Profit-loss ratio: 1: 5.14 (responsibility 837 for 163)

• Applicable scenarios:Investors Expect META Before ExpirationStay high or continue to rise and significantly above the $640 support range。 This strategy is suitable for situations where you are on the bullish side but want to control risks.