Meta has not been having a great time this year, as their stock has fallen by 61% in 2022. Recently, Altimeter Capital Chairman and CEO Brad Gerstner have written a critical letter expressing his doubts about the company’s future.
According to him, Meta has too many employees and is moving too slowly to retain investors’ confidence. The investor also recommended reducing headcount expenses by 20%, which roughly translates to 14,000-16,000 employees.
He also suggested limiting the company’s investments in “metaverse” technology (VR software and hardware) to no more than $5 billion per year. Unfortunately, for Zuckerberg, this comes just a few days ahead of the company’s quarterly earnings call. For context, Altimeter Capital owns more than 2 million shares in the company.
“Meta needs to re-build confidence with investors, employees and the tech community in order to attract, inspire, and retain the best people in the world. In short, Meta needs to get fit and focused.”
Brad Gerstner, Altimeter Capital Chairman and CEO
Investors losing faith in Meta and Mark Zuckerberg
This letter is the latest sign of investors losing faith in Meta and Mark Zuckerberg’s ambitions in VR/AR technology. The company has already invested significantly in its VR/AR by spending $10 billion per year on the technology. Gerstner states, “An estimated $100B+ investment in an unknown future is super-sized and terrifying, even by Silicon Valley standards.”
The former social media company has even changed its name from Facebook to Meta to better represent its focus and commitment to VR/AR technology. Unfortunately, Horizon Worlds (Meta’s VR world) hasn’t been that successful with the general public or even with Meta employees.
However, Meta has also seen significant success with its VR headset sales, especially with the Quest 2. The company has even launched a new VR headset, the Quest Pro, for $1,500.
Despite the success, Zuckerberg will likely need to address investor concerns during Meta’s Q3 earnings call. The company will hold its Q3 earnings call on October 26, 2022. Let us know what you think about Zuckerberg’s foray into the VR and AR industry in the comment section below.
