- Mark Zuckerberg's multi-billion dollar metaverse investment has drawn ire from at least one prominent tech investor.
- Brad Gerstner from Altimeter Capital published an open letter, telling Meta it has "lost the confidence of investors."
Mark Zuckerberg continues to lose support in his massive pivot to the metaverse.
At least one prominent investor is now encouraging Meta to cut back on its massive investment in Reality Labs, its metaverse project, saying the company has "lost the confidence of investors."
Brad Gerstner, whose fund Altimeter Capital owns hundreds of millions of dollars worth of Meta shares, published an open letter to Mark Zuckerberg and Meta's board of directors on Monday, titled "Time to Get Fit."
In the letter, he accuses Meta of drifting "into the land of excess" with "too many people, too many ideas, too little urgency." In addition, Gerstner wrote that the company's focus on the metaverse had distracted it from focusing on its core business, which, unlike the company's Reality Labs segment, generates profit.
Meta declined to comment regarding Gerstner's letter.
The past year has been a tumultuous one for Meta. Its metaverse business has reported more than $15 billion in losses since last year when the company made the surprise announcement that it would rebrand from Facebook to Meta.
The company's stock price is down more than 60% so far in 2022.
Meta is expected to report quarterly results later this week, and many experts expect losses from Reality Labs to keep ballooning.
While Gerstner counts Meta as his fund's third largest investment, he likely can't change the company himself without help from management or other investors. Altimeter Capital owns a stake of about $320 million, according to the Wall Street Journal, but that only equates with a 0.1% share of the company, according to Meta's latest filings with the SEC.
However, Gerstner's letter is part of a growing chorus of Meta investors and analysts expressing doubt about the viability of Meta's pivot.
Earlier this month, Zuckerberg presented the company's latest updates to Reality Labs, which many found disappointing. One analyst called the presentation "desperate."
Gerstner's letter included a list of suggested remedies to Meta's so-called lack of focus, including reducing the company's headcount by at least 20%, cutting annual capital spending by at least $5 billion, and limiting the company's investment in Reality Labs to no more than $5 billion a year - a massive cut based on the company's spending so far this year.