Mark Zuckerberg $100B Metaverse Bet

In an open letter, the CEO and founder of Altimeter Capital proposed that the IT giant owner Mark Zuckerberg reduce its annual spending in the metaverse from $10-15 billion to only $5 billion.

The investment that the internet giant has made into the Metaverse has been described as “super-sized and scary” in an open letter that a stakeholder has written to Meta CEO Mark Zuckerberg.

A considerable decrease in the firm’s stock price over the course of the past 18 months has prompted the shareholder to request that the corporation reduce the amount of money it invests in the metaverse and the technology arm associated with it.

The open letter was sent to both Mark Zuckerberg and the board of directors of Facebook, and it was released online on October 24. It was written by Brad Gerstner, who is also the CEO and founder of the technology investment firm Altimeter Capital. According to Hedge Follow, Altimeter Capital owns around 0.11% of the shares in Meta.

According to Gerstner, Meta’s entry into the metaverse, despite the fact that it is significant, should not attract as much commitment from the corporation as it presently does.

He stated that the business has indicated that it will be investing $10 billion to $15 billion per year into its Metaverse project, which includes AR/VR technology and Horizon World, but that it “may take ten years to deliver results,” explaining:

Even by the standards of Silicon Valley, a projected investment of more than $100 billion in a future that cannot be predicted is enormous and alarming.

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Instead, he has encouraged the corporation to place a greater emphasis on artificial intelligence (AI) and less on the metaverse, citing AI’s “potential to drive more economic output than the internet itself” as the rationale.

He continued by saying, “While most businesses will struggle to monetize AI, we believe Meta is extremely well positioned to harness AI to make all of its existing products better.”

Gerstner’s remarks were made on the same day that Bank of America downgraded Meta from a “buy” valuation to a “neutral” valuation. This was in part due to the fact that Bank of America expects its investments in Metaverse to continue to act as an “overhang” on the stock due to a “lack of progress” and “new competition from Apple.”

Gerstner stated that over the past 18 months, Meta’s stock has declined 55% compared to an average decline of 19% for its “big-tech peers.” This “mirrors the lost trust in the company, not merely the bad mood of the market,” according to Gerstner’s interpretation of the data.

Gerstner is not the only individual who believes that the future of the metaverse is one that is rather “uncertain.”

On July 30, Vitalik Buterin, one of the co-founders of Ethereum, stated that while “the Metaverse will come,” attempts by corporations such as Facebook will “fail” because “it’s far too early to know what people genuinely want.”

In the past year, the share price of Meta Platforms Inc. has dropped by 60.53 percent, bringing it down to $129.72 at the time of this writing. This is a much more significant decline in the current bear market than companies such as Apple, Amazon, and Google.

On October 26, 2022, Meta is going to release the results of its third-quarter 2022 report.

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