In an open letter published earlier today, Brad Gerstner, founder and chief executive of technology investment firm Altimeter Capital, called for major changes at Meta, arguing that the company has “drifted into the land of excess.”
Gerstner’s letter, addressed to Mark Zuckerberg and Meta’s board of directors, pointed out Meta’s “startling” financial decline over the past 18 months, which he says has included the company’s stock price dropping by 55%. “And notably, this decline in share price mirrors the lost confidence in the company, not just the bad mood of the market,” Gerstner wrote.
“An estimated $100bn+ investment in an unknown future is super-sized and terrifying, even by Silicon Valley standards,” he notes.
He suggests a three-point plan to help Meta “get its mojo back.”
Gerstner argues thatMeta has become bloated and lost sight of its core products and mission. “The company has become distracted by pursuits outside of its core products and business,” he wrote. “It is time to get back to basics.”
To that end, Gerstner’s suggests a three-point plan to help Meta refocus its efforts and get back on track:
Cut employee-related expenses by at least 20% by January 1: Gerstner argues thatMeta has become bloated and lost sight of its core products and mission. “The company has become distracted by pursuits outside of its core products and business,” he wrote. “It is time to get back to basics.”
Reduce capital expenses by $5bn: To helpMeta refocus its efforts, Gerstner suggests reducing capital expenses by $5bn. This will free up resources that can be reinvested in the company’s core products and business.
Cap metaverse-related expenditure: Gerstner also suggests capping expenditure onmetaverse-related projects. He argues that this will allow Meta to focus on its core products and business, which is what he believes will create value for shareholders in the long run. Conclusion: In his letter, Gerstner argues that Meta has become bloated and lost sight of its core products and mission. He suggests a three-point plan to help the company refocus its efforts and get back on track: cutting employee-related expenses, reducing capital expenditures, and capping metaverse-related expenditures. Only time will tell if Gerstner’s suggestions are implemented—and if they’re successful in helping Meta turn things around.
While it’s certainly true that Meta’s ambition comes with a large amount of risk, there is also the potential for a huge reward if the company is successful. The metaverse is still in its infancy, but it has the potential to become a massively popular platform where people can interact with each other and digital content in ways that are not possible in the physical world. If Meta can become a leading force in themetaverse, it could reap billions of dollars in revenue and transform into one of the most valuable companies in the world.
The metaverse is still in its early stages of development, but it holds immense promise. By 2023, global spending on virtual reality (VR) and augmented reality (AR) is expected to reach $25 billion, up from $2.9 billion in 2018, according to research firm International Data Corporation (IDC). And by 2025, IDC predicts that there will be more than one billion active AR/VR users worldwide. The metaverse could eventually become even bigger than VR and AR as it includes both technologies and offers a more immersive experience. Users could interact with each other and digital content in ways that are not possible in the physical world. Imagine being able to attend a concert or visit a museum without leaving your home. Or being able to try on clothes or test drive a car without having to go to a store. The potential applications of the metaverse are virtually limitless.
Investing inMeta carries a high degree of risk as the company is betting its future on an emerging technology that may never take off. The metaverse is still in its early stages of development and there’s no guarantee that it will ever become as popular as some people think it will. If Meta fails to gain traction for its AR headset or doesn’t succeed in building a strong presence in the metaverse, it could quickly become worthless. Given these risks, Gerstner’s concerns are understandable.
