A few months ago the company Meta faced an economic slowdown and, as a result, the shares fell 24% shortly after the balance sheet of quarterly earnings was halved. Among some possible reasons for this, the extravagance in the metaverse, Mark Zuckerberg's main bet and not even remotely unanimous among shareholders.
With the crisis, the company dropped out of the world's top 20 earnings ranking. Among those dissatisfied with the direction of the company is Brad Gerstner, a shareholder of Meta.
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Meta shareholder rejects the Metaverse
Brad Gerstner is CEO of Altimeter Capital, an investment fund that owns hundreds of millions of Meta shares. In an open letter published on the Medium website, he asked the company to reduce its focus on the metaverse and, to do so, lay off 20% of its employees. For him, Mark Zuckerberg's giant has become a "land of excess", with too many people, too many ideas and little urgency.
That is, the focus redirected to the metaverse – which even culminated in the change of the company's name – was created from the stagnation of social networks. But for him (and other investors) this change of focus was not very strategic, very hasty and not very productive. Find out more about what prompted CEO Brad Gerstner to make this public statement:
Meta vs competing big techs:
According to Brad, in the last 18 months, Meta's shares have fallen by 55%. However, the economic recession did not necessarily have the greatest influence on this parameter, after all, competing big techs had a decrease of about 19% in their shares. Therefore, this vertiginous drop reflects a breach of trust in the technology giant, and the biggest reason given is the exaggerated and little strategic investment in the metaverse.
Hopes for the future
Despite everything, the CEO of Altimeter Capital points out that Meta's core business is still effective, after all, it generated around US$45 billion in operating profit in 2021. The company also has cutting-edge technology to stimulate artificial intelligence and immersive 3D, which seem to be more pleasing to investors and the general public. Therefore, he points out some solutions to regain market confidence:
- First, it is necessary to fire 1/5 of the company's employees;
- You need to reduce annual capital expenditures. The goal is for spending to go from US$30 billion to US$25 billion;
- Do not invest more than US$5 billion per year in the metaverse. Currently, they invest more than twice as much.