In an open letter to Meta CEO Mark Zuckerberg, a shareholder described the tech giant’s investment in the Metaverse as “super-sized and terrifying.”
Following a significant drop in the company’s stock price over the last 18 months, the shareholder has urged the company to reduce its investment in the metaverse and its related technology arm.
The open letter, which was directed at Zuckerberg and the board of directors, was published on October 24. According to Hedge Follow, it was written by Brad Gerstner, CEO and founder of technology investment firm Altimeter Capital, which owns approximately 0.11% of Meta.
According to Gerstner, Meta’s foray into the metaverse, while significant, should not command the company’s current level of investment.
He stated that the company has announced annual investments of $10 billion to $15 billion in its Metaverse project, which includes AR/VR technology and Horizon World, but that it “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.”
Rather, he has urged the company to place a greater emphasis on artificial intelligence (AI) and less on the metaverse, claiming that AI “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 comments come on the same day that Bank of America downgraded Meta from a “buy” to a “neutral” valuation, citing its Metaverse investments as a “overhang” on the stock due to “lack of progress” and “new competition from Apple.”
Gerstner added that Meta’s stock has fallen 55% in the last 18 months, compared to an average of 19% for its “big-tech peers,” which he believes “mirrors the company’s lost confidence, not just the market’s bad mood.”
Gerstner isn’t the only person who believes the future of the metaverse is “uncertain.”
On July 30, Ethereum co-founder Vitalik Buterin stated that while “the Metaverse will happen,” corporate efforts like Facebook’s will “misfire” because “it’s far too early to know what people actually want.”
Meta Platforms Inc’s share price has dropped 60.53% in the last year to $129.72 at the time of writing, a far greater drop in the current bear market than Apple, Amazon, and Google.
On October 26, Meta will report its third-quarter 2022 results.
