The actual world has paid a heavy price for Mark Zuckerberg’s decision to pivot towards the metaverse.
The wealth lost by the CEO of Meta Platforms stands out even in a difficult year for nearly all US tech giants. Most among the ultra-rich people tracked by the Bloomberg Billionaires Index, their fortune has been reduced by half and then some, falling by $US71 billion ($106 billion) so far this year.
His net worth, which is $55.9 billion, places him 20th among all billionaires in the world, which is his lowest position since 2014 and places him behind three Waltons and two Koch family members.
Only Jeff Bezos and Bill Gates command larger fortunes today than the $US106 billion Zuckerberg, 38, was worth less than two years ago when he was among an exclusive group of global billionaires. When the company’s shares hit a high of $US382 in September 2021, his wealth reached a pinnacle of $US142 billion.
The company name was changed from Facebook to Meta the following month by Mark Zuckerberg. From there, things have mostly gone south as it tries to establish itself in the tech world.
Recent earnings reports from it have been terrible. When the firm announced in February that there had been no increase in monthly Facebook users, its stock price fell dramatically and Zuckerberg’s income was reduced by $US31 billion, one of the largest one-day drops in wealth ever.
Other problems include Instagram’s decision to invest in Reels, and its response to TikTok’s short-form video platform, despite the fact that it will generate less advertising revenue than TikTok. Additionally, the industry as a whole has been impacted by lower marketing spending because of worries about an economic slowdown.
According to Laura Martin, senior internet analyst at Needham & Co., the company’s investments in the metaverse are also depressing the stock. In the upcoming three to five years, Zuckerberg has stated that he anticipates the initiative to experience “substantial” financial losses.
Martin stated that in the interim, Meta “needs to get these users back from TikTok.” Additionally, “extra regulatory scrutiny and intervention” are a hindrance, according to her.
In 2022, the California-based business will do worse than the majority of its FAANG competitors. It has decreased by around 57% this year, a significant amount higher than Apple’s 14%, Amazon.com’s 26%, and Google parent Alphabet’s (29%). Even so, Meta is closing the loss gap in 2022 compared to Netflix, which is down by around 60%.
The social network behemoth “would be more in line with where Alphabet is” if it weren’t for its venture into virtual reality, according to Mandeep Singh, a technology analyst at Bloomberg Intelligence. He said that Meta may get over this problem by spinning out some of its other companies, like WhatsApp or Instagram.
Meta stock is where almost all of Zuckerberg’s wealth is invested. According to the most recent proxy statement from the corporation, he owns more than 350 million shares.
In a way, Zuckerberg has tried to rebrand. In a three-hour interview on Joe Rogan’s podcast, he continually referred to himself as a “product designer” and recently posted a video of himself engaging in mixed martial arts.
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