Facebook CEO Mark Zuckerberg introduced the Metaverse on October 28, 2021, rebranding the social media behemoth Facebook as META and encouraging an alternate reality setting. Investors have lost all faith in the CEO of Meta as he moves forward with his wager on the Metaverse because the strategy may not have succeeded as Zuckerberg had hoped.
According to earnings reports published last month, Zuckerberg had invested more than $36 billion in the failing business since 2019 and has seen more than $30 billion go in a matter of a few months, putting the organization in danger of going bankrupt.
Analysts and investors have attributed the company’s failure on Zuckerberg and other executives’ turn away from social networking and toward the Metaverse, which hasn’t attracted enough attention. Share prices for the massive social networking company are currently down close to 70% from last year, but they were on the rise after the revelation.
The company Reality Labs, which includes Metaverse and Facebook’s VR business, recorded just $5.3 billion in sales for the year, after incurring a total operating loss of $30.7 billion since funding for the project started in 2019.
Even though Reality Labs only generated $2.3 billion in revenue over that time period, the accounts show that costs and expenses for the company were $12.5 billion in 2021.
The data strongly suggests that investments for this year are now on track to surpass those for 2021, with lab expenditures and expenses rising to $10.8 billion during the first few months of 2022, a period during which the division reported only $1.4 billion in sales.
A third-quarter earnings report that also revealed Reality Labs had generated an operating loss of $9.4 billion for the first nine months of 2022 alone followed the worrying financial statistics.
Top officials claim they anticipate the losses to increase given the project’s continued progress.
“We do anticipate that Reality Labs operating losses in 2023 will grow significantly year-over-year,” After the much-awaited release of the data, CFO David Wehner commented.
In an open letter to the firm last month, Brad Gerstner, whose fund Altimeter Capital holds shares of Meta worth hundreds of millions of dollars, made it apparent that investors are losing faith in Zuckerberg.
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He suggested reducing the company’s headcount by at least 20 percent by January and said the company should limit its investments in the Metaverse to no more than $5 billion per year.
The huge financial loss has given birth to rumors that Zuckerberg will step down at Meta. The rumors came as Facebook lays off large swaths of employees as the company’s profits sag.
The rumor circulating was that insiders had told The Leak that the 38-year-old has decided to step down as the head of Meta, the parent company of Facebook and Instagram. They say the decision ‘will not affect’ the Metaverse, Zuckerberg’s multi-billion dollar virtual reality project that has lost the company at least $30 billion. CONTINUE READING…