Metaplatforms (NASDAQ:AAPL) and the Metaverse are hot topics. It feels like Mark Zuckerberg is pouring billions into his vision for the new internet right now. It is very, very doubtful that this will ever be the novelty and the billion euro market that the CEO already sees in the short term.
However, the CEO sticks to his investments. In the short term, this weighs on the quarterly figures, and there is also less volume for share buybacks. In a declining market, the top executive would rather lay off core staff than cut those metaverse investments. A hot bet that should certainly give rise to discussions or even more if the vision fails.
In any case, an investor at Meta Platforms is already losing patience. Let’s take a closer look at this development.
Meta Platforms and Metaverse: No more patience!
Brad Gerstner, CEO of Altimeter Capital, has now openly denounced Meta Platforms’ investment in the Metaverse. He last owned about 2.45 million shares in the technology group, which means he has a lot of clout. But not in comparison with Mark Zuckerberg, of course.
Nonetheless, Gerstner says he is indeed backed to continuously invest in a product-driven future. They also share the vision of a more connected and open world. However, the mission got lost. This is all the more vengeful as the world of zero tariffs (he is probably referring to the possibility of lower borrowing costs) has come to an end. Meta Platforms, on the other hand, has reached the land of excess with its investments.
At the same time, the prevailing opinion is that the management of Meta Platforms has undermined the previous core business. They are now investing billions in the Metaverse to take a new direction. However, this only affects the financial results. Gerstner therefore demands a very direct stop. In his opinion, it would be appropriate to reduce the staff. At the same time, however, investments in this conversion process should be reduced to a total of US$25 billion, with investments in the Metaverse capped at a maximum of US$5 billion.
What happens to the position?
Gerstner will be well aware that when in doubt, his stock package won’t be enough to outplay Mark Zuckerberg. Its orientation will likely be the deciding factor for the foreseeable future. And the outgoing CEO wants to redefine the Metaverse. I guess even this fire letter doesn’t change much about that.
However, this open letter shows one thing: the top management around Mark Zuckerberg is under surveillance. The bet on the Metaverse should be a success or the tone could be clearer. Let’s hope the CEO knows what he’s doing with his big investments. Or for what exactly.
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Vincent owns shares of Meta Platforms. The Motley Fool owns stock and recommends Meta Platforms.