An investor asks Mark Zuckerberg to throw in the towel with the metaverse

  • Mark Zuckerberg’s multimillion-dollar investment in the metaverse has drawn the ire of at least one prominent tech investor.
  • Brad Gerstner of Altimeter Capital has published an open letter telling Meta that he “has lost investor confidence.”
  • Gerstner suggested layoffs and limit investment in the company’s metaverse in order for Meta to regain “focus”.
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Mark Zuckerberg continues to lose support in his radical change of course towards the metaverse. At least one prominent investor is now encouraging Meta to cut back on its huge investment in Reality Labs, its metaverse project, saying the company has “lost investor confidence.”

The metaverse is headed for “the land of excess,” the investor assured.

Brad Gerstner, whose Altimeter Capital fund owns hundreds of millions of dollars worth of Meta stock, published an open letter to Mark Zuckerberg and the Meta board of directors on Monday, titled “Time to Get in Shape.”

In the letter, he accuses Meta of drifting “into the land of excess” with “too many people, too many ideas, and too little urgency.”

Also, as an investor, Gerstner thinks the company’s focus on the metaverse has distracted it from focusing on your core businesswhich, unlike the Reality Labs segment, generates profits.

Meta declined to comment to Business Insider on Gerstner’s letter.

The last year has been complicated for Meta

Its business in the metaverse has posted more than $15 billion in losses since last year, when the company unexpectedly announced it would switch the name of your Facebook parent to Meta.

The company’s share price is down more than 60% so far in 2022.

Meta will present its quarterly results later this week, and many experts expect Reality Labs’ losses to continue to mount.

Brad Gerstner owns $320 million stake in Meta

Although Meta is the third largest investment in Gerstner’s fund, this investor may not be able to turn the company around on his own without help from management or other investors.

Altimeter Capital owns a stake of about $320 million, according to the Wall Street Journal, but that’s only 0.1% of the company, according to Meta’s latest SEC filings.

Earlier this month, Zuckerberg unveiled the company’s latest updates as part of Reality Labs, which had numerous negative reactions.

One analyst called the filing “desperate.”

Gerstner’s letter included a list of improvement proposals for Meta’s lack of focus:

  • Reduction of the company’s workforce by at least 20%,
  • Cut annual capital spending by at least $5 billion
  • Limiting the company’s investment in Reality Labs to no more than $5 billion per year

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An investor asks Mark Zuckerberg to throw in the towel with the metaverse