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Zuckerberg's $100 billion Metaverse gamble is "outrageous and terrifying," shareholder says

Published on

December 25, 2022
Read Time:2 Minute, 17 Second

In an open letter from a shareholder to Meta CEO Mark Zuckerberg, the tech big's funding within the Metaverse was described as "outrageous and terrifying."

The shareholder has urged the corporate to cut back its funding in Metaverse and its associated expertise arm amid a big decline in its share worth over the previous 18 months.

The open letter was revealed on October 24 and was directed at Zuckerberg and on the board. It was written by Brad Gerstner, CEO and founding father of expertise funding agency Altimeter Capital, which owns a roughly 0.11% stake in Meta. according to to hedge penalties.

Gerstner mentioned that whereas Meta's foray into the Metaverse is essential, it should not require as a lot funding from the corporate because it at the moment does.

He mentioned the corporate has introduced investments of $10 billion to $15 billion a yr in its Metaverse mission, together with AR/VR expertise and Horizon World, however "it might take 10 years to see outcomes," he defined :

"An estimated funding of over $100 billion in an unknown future is outrageous and daunting, even by Silicon Valley requirements."

Reasonably, he urged the corporate to focus extra on synthetic intelligence (AI) and fewer on the Metaverse as a result of it "has the potential to drive extra financial productiveness than the web itself."

"Whereas most corporations will battle to monetize AI, we imagine Meta is extremely properly positioned to leverage AI to reinforce all of its current merchandise," he added.

Financial institution of America acquired Gestner's feedback the identical day demoted Meta from a "purchase" to "impartial" score partially as a consequence of its Metaverse investments, which can probably stay an "overhang" within the inventory as a consequence of "lack of progress" and "new competitors from Apple."

Gerstner added that Meta's inventory is down 55% over the previous 18 months, in comparison with a mean of 19% for its "huge tech friends," which he says "displays misplaced confidence within the firm, not solely the unhealthy temper of the corporate market."

Associated: Fb is on a quest to destroy Metaverse and Web3

Gerstner is not the one one who thinks the way forward for the metaverse is comparatively "unsure."

On July 30, Ethereum co-founder Vitalik Buterin mentioned that whereas “the metaverse will occur,” company makes an attempt like Fb’s are “failing” as a result of “it’s means too early to know what folks really need.”

Meta Platforms Inc. inventory worth (META) is down 60.53% over the previous yr to $129.72 on the time of writing - a far greater drop within the present bear market than Apple, Amazon and Google.

Meta is anticipated to launch its third quarter 2022 outcomes on October 26.

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Azeez Mustafa
Azeez began his FinTech career path in 2008 after growing interest and intrigue about market wizards and how they managed to become victorious on the battlefield of the financial world. After a decade of learning, reading and training the ins and outs of the industry, he’s now a sought after trading professional, technical/currency analyst and funds manager – as well as an author.
Last Updated : December 25, 2022
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