Metaverse, because it is going the wrong way for Meta’s shareholders

Half is investing too many resources on the metaverse. This is the accusation made on 24 October by Altimeter Capital CEO Brad Gerstner, in an open letter to the Menlo Park company and founder Mark Zuckerberg.

The holding company it controls Facebook, Instagram and Whatsapp it would have too many employees and would be fielding few policies to maintain investor confidence, including the Altimeter fund, which held approximately two million Meta shares at the end of June. For this reason, Gerstner recommends Zuckerberg to put in place a plan that will help regain strength and that includes, for example, a 20% reduction in staff costs and an expense ceiling of 5 billion dollars a year maximum for technologies related to metaverse.

“Half – Altimeter CEO writes – needs rebuild their relationship of trust with investors, employees and the tech community for attract, inspire and retain the best people in the world“, essentially “To get in shape and focus“.

The letter is the a symptom of the concern of the holding’s investorsalso linked to the collapse of 61% of its stock market value in 2022. An unease that denotes lack of confidence in the ambitions that Meta has shown to have in the world of virtual and augmented reality. Ambitions, however, underlined by investments of around 10 billion per year for your own hardware and software Vr. Just on 11 October the company announced the Quest Pro, a high-end virtual and augmented reality headset. However, investors complain that, in the face of huge expenses, few users show interest for these products and for apps and games like Horizon Worlds.

“People – specifies Gerstner in the letter – they don’t quite know what the metaverse is. If the company only invested a billion or two billion dollars in this project, that confusion might not even be a problem“. For Altimeter CEO, the amounts Meta is spending could add up by at least a decade before bringing good results. “An investment of over $ 100 billion on a unknown future is huge and terrifying, even by Silicon Valley standards“, writes Gerstner.

Ultimately, the investor’s belief is that Meta has too many employees and it should control expenses to improve the value of their shares. A 20% staff cut would bring Meta back to last year’s employment levels and help it to counteract the increase in management costs. “We believe – concludes Gerstner – that the recommendations outlined above will lead to a leaner, more productive and more focused company. To a company that regain confidence and momentum“.