What Went Wrong At Meta Last Quarter And How Pete Najarian Is Positioning Ahead Of Earnings After The Bell

Meta Platforms Inc FB shares are trading at 52-week lows Wednesday ahead of earnings after the bell.

Market Rebellion co-founder Pete Najarian is a long-term Meta (formerly Facebook) investor, but he's making some adjustments ahead of the report.

"I am positioned by having puts to the downside, selling upside calls and giving myself a little bit of room because of the way the options are trading," Najarian said Wednesday on CNBC's "Fast Money Halftime Report."

The options premiums are "outrageous," he said, which makes it easier for him to sell covered calls against his long-term stock position. At least he's collecting enough premium to not worry about limiting some of his upside.

See Also: If You Invested $1,000 In Facebook's Stock When It Announced Meta Name Change, Here's How Much You'd Have Now

Why Hedge? Najarian noted Meta's most recent earnings report was a disaster because management "took their eye off the ball."

Meta shifted its focus entirely to the metaverse, which left some investors asking about the future of Facebook and Instagram, he explained.

"It wouldn't have been a problem had he given us that they were absolutely dead focused still on Instagram and Facebook and all of the other parts of what Facebook really is," Najarian said.

The $10 billion investment in the metaverse is great, he said, but the point is that Meta should have reassured its investors of the company's continued focus on its existing products.

Netflix Inc NFLX did the same thing, Najarian said: "They didn't keep up with their subs, they took their eye off the ball."

Najarian is positioned for volatility in Meta. The company is set to announce its first-quarter financial results after the market closes today and a conference call to discuss the results will begin at 5 p.m. ET.

FB Price Action: Meta shares were down 4.7% at $172.44 at time of publication.