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Home Crypto Metaverse

Metaverse requests Facebook to cut down extra expenses, company loses investors 

Prity Khanal by Prity Khanal
October 26, 2022
in Metaverse
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Metaverse requests Facebook to cut down extra expenses, company loses investors 
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CEO of Facebook, Mark Zuckerberg, received a letter from its shareholder named Altimeter Capital Management stating that the parent company of Facebook – Meta needs to cut down expenses and jobs on Monday. 

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The reason behind the letter was to make the company aware that it has been losing the confidence of many investors and will keep losing if it continues to spend too much on the metaverse. 

 

What exactly happened? 

 

Meta has spent billions to build the metaverse. The company also hired thousands of employees from around the world to create this dream. Even after investing so much, the company’s dream remained sketchy as the company named Reality Labs unit which works on virtual reality has been repeatedly facing losses. A total of US$5.8 billion was lost by the lab in the first half of the year. 

 

After this huge investment made for something whose success is uncertain is what worrying the shareholders. The company has already lost the trust and confidence of many investors as the expenses are increasing. The company mainly focused on hedge funding with a stake of 0.1 percent. 

 

What is a hedge fund? 

 

A hedge fund is a limited partnership of private investors whose capital is managed by professional fund managers who use a wide range of strategies, including leveraging or trading of non-traditional assets, to earn above-average investment returns.

 

What is Metaverse? 

 

Metaverse is virtual reality space which can also be defined as a simulation of our environment or simulated digital environment, a virtual world that imitates the features of the physical world that uses AR (augmented reality) and VR (virtual reality), blockchain technology and web3. Some examples are Facebook Horizon, Roblox, etc

 

What is Altimeter capital management? 

 

Altimeter capital management is a technology focused investment firm based in California. It manages a variety of venture and public equity funds and private growth equity funds.

 

Altimeter suggested that the cash flow of Meta can reach upto $40 billion if the headcounts are cut by 20 percent. Moreover, capital expenditure has to be under US $5 to 25 billion within a year. It further suggested that the annual investment of the company must be US $5 billion instead of spending $10 billion dollars. 

 

Free cash flow indicates the money of the company from where it provides interest to investors or to repay creditors. To calculate free cash flow, we have to subtract net operating profit after taxes with investment during the period. 

 

Tags: #metaverse #fb #facebook #markzukerberg #fbshare #shareholder #altimetercapitalmanagement #headcountcut #international #technology #tech #business #socialmedia
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Prity Khanal

Prity Khanal

Prity is a content writer whose passion lies in writing to inspire others. She specialises in the field of law. With a curious mind and love for research and proficiency in creating informative narratives, she has specialised in tech, crypto, and is up-to-date with current market changes and flexible in various other fields.

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