Stop loss in time? Meta shareholders call on Mark Zuckerberg to stop burning money in the Metaverse!

Meta's shareholder Altimeter Capital Management said in an open letter to Zuckerberg and the company's board of directors that Meta must cut jobs and capital expenditures. The technology-focused hedge fund, which holds 0.1% of the shares, insists that Meta lost investor confidence when it increased spending and turned to Metaverse. This suspicion seems to have been confirmed, as Meta's financial results have shown considerable losses and continued to perform poorly throughout 2022.

Over the past 18 months, Meta's stock price has evaporated 55%, while its large technology peers have fallen an average of 19%. The decline in stock prices also reflects the loss of confidence in Meta. Meta shareholders have suggested that Zuckerberg lay off employees and cut costs.

With this in mind, Altimeter Capital Management recommended to Meta a three-step plan to double annual cash flow to $40 billion: reduce headcount by at least 20%; reduce annual capital expenditures by at least $5 billion, from $30 billion to $25 billion; and limit investment in the Metaverse to no more than $5 billion per year.

In response, Meta said it would encourage companies to take aggressive action to reduce employee-related expenses by at least 20% by January 1, 2023, in order to return to the employee spending level of mid-2021.

Last June, Meta cut its plans to recruit engineers by at least 30%, and Zuckerberg warned employees to prepare for a recession.

Zuckerberg is burning money in the Metaverse

Zuckerberg has invested tens of billions of dollars in the metaverse and hired thousands of workers around the world to develop his long-awaited virtual world, but the dream of this technology company seems to be in vain, because the RealityLabs department, which works on augmented reality and virtual reality, has reported huge losses in succession. In the first six months of 2022, it has lost $5.8 billion.

It is understood that Meta has also significantly increased its capital expenditures over the past three years. Even without counting its huge investment in the Metaverse, the tech company's annual capital expenditures have increased from $15 billion in 2018, 2019, and 2020 to $30 billion in 2022. In the long run, excluding the huge investment in the Metaverse, Meta's capital expenditures even exceed the sum of Apple, Tesla, Twitter, Snap, and Uber.

Editor ✎Estella/

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