Facebook Suffers a Big Setback
Author Neal Stephenson coined a word to represent a place where human avatars communicate with each other in his 1992 novel “Snow Crash”.
That term was “metaverse”, and it has now become part of the vernacular as the concept has moved beyond the domain of science fiction and into everyday life.
A Expensive Conversion
The corporation formerly known as Facebook (FB) – Get Meta Platforms Inc. Class A Report changed its name to Meta in October after CEO Mark Zuckerberg dubbed the metaverse as “the next frontier.”
The metaverse has been defined as a network of 3D virtual worlds focused on social connection, however Meta has encountered some serious roadblocks on its way to the next frontier.
Frances Haugen, a former product manager, accused the social media giant of prioritizing revenues over the impact of hate speech.
Meta Platforms reported lower-than-expected fourth-quarter earnings in February, indicating that the conversion has been costly.
The results smacked Zuckerberg straight in the wallet, as he lost $29.7 billion off his net worth, while his company’s market capitalization fell by about $237 billion a day after the results were released.
The company’s Reality Labs division lost $10.2 billion in 2021, more than doubling its operating losses of $4.62 billion in 2020. The operational loss in 2019 was $4.5 billion.
The Securities and Exchange Commission has finally arrived.
The agency recently ordered that Meta must allow investors to study and vote on a shareholder proposal that calls into question the “social license to operate an emerging technology like the metaverse” without fully appreciating the potential risks and negative consequences.
The “SEC’s decision is a triumph for investors who truly challenge Zuckerberg’s leadership and shift into the metaverse,” said Natasha Lamb, managing partner of Arjuna Capital, one of the parties who filed the petition in December.
‘We Value Our Investors’ Opinions’
“This ruling clears the way for investors to better understand the potential psychological and human rights risks of the metaverse and weigh in on whether Meta should be investing $10 billion per year in an emerging technology, especially when they are so clearly failing to manage risks on their core platforms,” Lamb told TheStreet.
She went on to say that it’s crucial to remember how important Meta’s shift to the metaverse is to investors.
“When it revealed negative earnings growth last quarter, spurred by this $10 billion investment,” she said, “its stock experienced the greatest loss in stock market ever.”
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