I feel like there are two camps out there (with some people believing a bit of both): one believes the metaverse is overhyped, destined to fail, etc. Maybe they’re right.
The other doesn’t like that Meta is pouring money away from its core business, fueling huge losses (in the reality labs segment) and crimping meta’s once-fantastic operating margin. Meta’s core business is otherwise doing fine (general economic/Apple issues aside—users/engagement is excellent). If it ain’t broke, why fix it?
I’m a big believer that businesses (especially tech ones) need to continue to innovate, or die—what works now will not work in 20+ years. What’s the endgame if meta focused only on its family of apps? Maybe it can monetize WhatsApp, reels, etc. better, but how confident is anyone in the longevity of meta’s social media platforms? If meta were to drop its metaverse ambitions, it would have plenty of cash to pay nice dividends and slowly die; like most companies, once sleepy management wakes up and realizes its imminent demise, it would make an expensive acquisition that magically doesn’t realize the synergies that management sold the board and the market on.
Maybe zuckerberg’s conviction in the metaverse is misguided. However, the decision to build elsewhere (and in a way that is not antithetical to the company’s mission/culture) is imperative.
Personally, I believe that the metaverse will be real and important. Meta’s deep pockets and focus on the area give it a unique and potentially transformative position in the space.
Tl;dr: I believe concerns over meta are overblown, and the stock is undervalued
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