Zuckerberg’s $100B metaverse gamble is ‘super-sized and terrifying’ — shareholder

A shareholder’s open letter to Meta CEO Mark Zuckerberg has labeled the tech big’s funding into the Metaverse as “super-sized and terrifying.”

The shareholder has urged the corporate to scale down its funding within the metaverse and its associated expertise arm amid a major fall in its inventory worth over the past 18 months. 

The open letter was printed on Oct. 24 and was directed at Zuckerberg and the board of administrators. It was authored by Brad Gerstner, CEO and founding father of expertise funding agency Altimeter Capital, which owns roughly a 0.11% share in Meta, according to Hedge Observe.

Gerstner mentioned that Meta’s foray into the metaverse, whereas vital, mustn’t command as a lot funding from the corporate because it at present does.

He mentioned the corporate has introduced investments of $10 billion to $15 billion per yr into its Metaverse mission, together with AR/ VR tech and Horizon World, however “may take 10 years to yield results,” explaining: 

“An estimated $100B+ investment in an unknown future is super-sized and terrifying, even by Silicon Valley standards.”

Relatively, he has urged the corporate to focus extra on synthetic intelligence (AI) and fewer on the metaverse, because it “has the potential to drive more economic productivity than the internet itself.”

“While most companies will struggle to monetize AI, we believe Meta is incredibly well positioned to leverage AI to make all of its existing products better,” he added.

Gerstner’s feedback come on the identical day the Financial institution of America downgraded Meta from a “buy” to “neutral” valuation, partly because of its Metaverse investments more likely to stay an “overhang” on the inventory due to the “lack of progress” and “new competition from Apple.”

Gerstner added that over the past 18 months, Meta’s inventory has fallen 55% in comparison with a mean of 19% for its “big-tech peers,” which he suggests “mirrors the lost confidence in the company, not just the bad mood of the market.”

Associated: Facebook is on a quest to destroy the Metaverse and Web3

Gerstner isn’t the one particular person to assume the way forward for the metaverse is a comparatively “uncertain” one both.

On July 30, Ethereum co-founder Vitalik Buterin mentioned that whereas “the Metaverse will happen,” company makes an attempt such as those by Facebook will “misfire” as a result of “it’s far too early to know what people actually want.”

The share worth for Meta Platforms Inc has plummeted 60.53% over the past yr to $129.72 on the time of writing — a far larger fall within the present bear market than the likes of Apple, Amazon and Google.

Meta is ready to report its third-quarter 2022 outcomes on Oct. 26.