Meta Investors Losing Faith in Metaverse

Meta Platforms shareholders hit out at the company’s management about its plans to increase spending on its long-term bet around the metaverse. Their reaction is following Q3 business results which investors considered disappointing.

Financial Times reported there is a rising level of anger at CEO Mark Zuckerberg’s plans around the metaverse, which sees Meta continue to plow ahead despite losing the confidence of its backers. A 4% decline in revenue and a 52% drop in net income during Q3 wiped $65 billion from Meta’s market capitalization as its share price tumbled. The company’s Reality Labs unit, tasked with building the metaverse, experienced losses of $3.7 billion in Q3, up $1.1 billion, with the nine-month loss at $9.4 billion.

The bad reaction to these figures was heightened after the company stated losses would grow significantly in 2023, with Meta predicting CAPEX would reach as much as $39 billion. Jim Tierney, chief investment officer for US growth at Meta Platforms’ shareholder AllianceBernstein, told FT if any other company had pursued such a strategy you’d have activist investors writing letters, proposing alternative slates of directors, demanding change. David Older, head of equities at asset manager Carmignac added Zuckerberg was tone-deaf to the investment community. Commenting on the shareholder disquiet Meta told FT it valued the opinions of investors and regularly engage with them to ensure that they were aware of their respective perspectives.