Zuckerberg’s $100 billion metaverse gamble is “super big and scary,” shareholder says
A shareholder’s open letter to Meta CEO Mark Zuckerberg has labeled the tech giant’s investment in Metaverse as “super large and terrifying.”
The shareholder has urged the company to scale back investments in Metaverse and its related technology arm amid a significant drop in its share price over the past 18 months.
The open letter was published on October 24 and was directed at Zuckerberg and the board. It was authored by Brad Gerstner, CEO and founder of technology investment firm Altimeter Capital, which owns about 0.11% of Meta, according to Hedge Follow.
Gerstner said that Meta’s entry into the Metaverse, while important, should not require as much investment from the company as it does now.
He said the company has announced investments of $10 billion to $15 billion per year in the Metaverse project, including AR/VR technology and Horizon World, but “may take 10 years to pay off,” he explains:
“An estimated $100 billion investment in an unknown future is super-big and scary, even by Silicon Valley standards.”
Rather, he has urged the company to focus more on artificial intelligence (AI) and less on the Metaverse, as 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 existing products better,” he added.
Gestner’s comments come on the same day that Bank of America downgraded Meta from a “buy” to a “neutral” rating, in part because the Metaverse investments are likely to remain an “overhang” on the stock due to the “lack of progress” and ” new competition from Apple.”
Gerstner added that over the past 18 months, Meta’s stock has fallen 55% compared to an average of 19% for its “big-tech peers,” which he suggests “reflects the loss of confidence in the company, not just the bad mood to the company. market.”
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Gerstner isn’t the only one who thinks the future of Metaverse is relatively “uncertain” either.
On July 30, Ethereum founder Vitalik Buterin said that while “the metaverse will happen,” corporate attempts like those from Facebook will “misfire” because “it’s way too early to know what people actually want.”
Meta Platforms Inc (META) shares have plunged 60.53% over the past year to $129.72 at the time of writing – a far bigger drop in the current bear market than the likes of Apple, Amazon and Google.
Meta will report its results for the third quarter of 2022 on 26 October.