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Why Matterport Stock Jumped 19% in October

By Beth McKenna – Nov 3, 2021 at 9:58AM

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Investors in the spatial data company can thank Meta (formerly known as Facebook) for last month's robust performance.

What happened

Shares of Matterport (MTTR 4.44%) jumped by 18.7% in October, according to data from S&P Global Market Intelligence, well exceeding the S&P 500 index's 7% return last month. The catalyst for the spatial data company stock's pop was news from Meta (META 3.01%) -- formerly known as Facebook. Investors view the social media giant's strategic shift as a potentially big positive for Matterport.

Since Matterport went public in July via a merger with a special purpose acquisition company, its stock has gained 65.2%. Here, too, its performance is trouncing that of the S&P 500, which has returned 6.4% over the same period.

Interlocking cogs marked with terms such as Virtual, Real, and Metaverse.

Image source: Getty Images.

So what

Matterport stock was up just 0.5% in October until the last trading day of the month. On Oct. 29, its shares shot up by 18.2%. Shareholders had Meta to thank for their early Halloween treat.

On Oct 28, the social media behemoth announced that it was rebranding itself as Meta, and said that its focus will be to "bring the metaverse to life."  The metaverse is a "highly immersive virtual world where people gather to socialize, play, and work," in the words of Merriam-Webster.  Meta views the metaverse as the next evolution of social media, saying the technology will "let you share immersive experiences with other people even when you can't be together -- and do things together you couldn't do in the physical world."

Matterport's platform enables users to create immersive 3D digital replicas -- or "digital twins" -- of physical spaces. So, while it's too early to tell how things will shake out, it seems quite possible that Matterport could benefit from Meta's focus on the metaverse. The two companies are already partners. In June, they announced that they were teaming up to "make the largest-ever dataset of 3D indoor spaces available exclusively for academic, non-commercial uses."

They believe that this dataset of digital twins will "play a significant role in advancing embodied AI [artificial intelligence] research which seeks to teach robots and virtual AI assistants to understand and interact with the complexities of the physical world."

Now what

Investors should be getting material news very soon. Matterport is scheduled to report its third-quarter results after the market close on Wednesday.

As outlined in my earnings preview, Wall Street is expecting revenue of $29.1 million, which would be about flat compared to last quarter's result. Analysts are also modeling for an adjusted loss per share of $0.07, which would be a big improvement over last quarter, when the company posted a loss per share of $0.62.

Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Beth McKenna has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Matterport, Inc. and Meta Platforms, Inc. The Motley Fool has a disclosure policy.

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