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

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

The shareholder urged the corporate to cut back its funding in Metaverse and its associated know-how arm amid a big drop within the inventory worth over the previous 18 months.

The open letter was printed on October 24 and was directed at Zuckerberg and the board of administrators. In line with Hedge Observe, it was written by Brad Gerstner, CEO and founding father of know-how funding agency Altimeter Capital, which owns roughly 0.11% stake in Meta.

Gerstner mentioned Meta’s entry into the metaverse, whereas vital, should not draw as a lot funding from the corporate because it at present does.

He added that the corporate has introduced investments of $10 billion to $15 billion per 12 months in its Metaverse undertaking, together with AR/VR know-how and Horizon World, however “might take 10 years to ship outcomes,” explaining:

“The projected $100B+ funding within the unknown future is super-sized and terrifying, even by Silicon Valley requirements.”

As a substitute, he urged the corporate to focus extra on synthetic intelligence (AI) and fewer on the metaverse, because it “has the potential to drive better financial productiveness than the Web.”

“Whereas most corporations will wrestle to monetize AI, we consider Meta is extremely properly positioned to leverage AI to enhance all of our present merchandise,” he added.

Gestner’s feedback come on the identical day that Financial institution of America downgraded Meta from a “purchase” to a “impartial” valuation, partly due to its Metaverse funding with “lack of progress” and “new competitors from Apple.”

Gerstner mentioned that over the previous 18 months, Meta’s inventory has fallen 55% in comparison with a mean of 19% for its “big-tech friends,” which he suggests “displays misplaced confidence within the firm, not Exhibits solely unhealthy temper. Mandi.”

associated: Fb is making an attempt to destroy the Metaverse and Web3

Gerstner is not the one one that thinks the way forward for the Metaverse is comparatively “unsure.”

On July 30, Ethereum co-founder Vitalik Buterin mentioned that when “the metaverse occurs,” company efforts like Fb will “misfire” as a result of “it is too early to know what individuals actually need.”

The share worth for Meta Platforms Inc. (Meta) has fallen 60.53% over the previous 12 months to $129.72 — a far better drop than the likes of Apple, Amazon and Google within the present bear market.

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