Altimeter Capital Management's Boss Advises Meta to Cut Metaverse Expenditure

One of the top shareholders at Meta, Altimeter Capital Management, has written an open letter to the platform’s board of directors.

Oct 27, 2022
by Michael
Altimeter Capital Management's Boss Advises Meta to Cut Metaverse Expenditure
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Before the release of Meta Q3 expenditure, the founder and CEO of Altimeter Capital Management, Brad Gerstner, wrote an open blog post to the board of directors at Meta. He advises the team should implement his suggested 3-step plan to restore the confidence of investors.  

Gerstner, in his 3-step plan, tells Meta to reduce the headcount expenses by at least 20%, reduce the CAPEX by at least $5B and limit the expensive expenditure on the metaverse to $5B in a year. However, Meta sees the metaverse as the future of social interactions, and it is not willing to back down. The company has lost $9.4B in the first three quarters of 2022.

The CEO of Altimeter Capital Management wrote:

“Meta needs to rebuild trust with investors, employees, and the tech community to attract, inspire and retain the best people in the world. In short, Meta needs to get fit and focused.”

In the past twelve months, Meta has spent $56.2 billion on its operating expenses. The company spent $36.6 billion and $48.5 billion in 2020 and 2021, respectively. The increasing number of Meta’s employees is the sole reason for the spike in operating expenses.  

Recent Sanctions Against Meta 

In recent times, several regulating bodies have raised concerns about the current state of the tech giant. A UK-based antitrust watchdog instructed the company to sell the GIF platform Giphy. Later, Wall Street filed a document showing that Meta’s Horizon World is not attracting Permanent Residents. 

Meta is facing a lawsuit from the Federal Trade Commission, which aims to prevent the software company from acquiring Within, a VR company. The trading firm believes Meta will become more powerful in the rapidly developing industry. Bank of America has demoted Meta stock from a Buy rating to a Neutral rating considering its revenue projections for Q4 and 2023. In addition, BofA reduced the price of Meta shares to $150 from $190.

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