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The hysteria around Meta earnings report has been really fascinating to watch. Starting most recently with the activist letter telling Meta to give up on the Me

The hysteria around Meta earnings report has been really fascinating to watch. Starting most recently with the activist letter telling Meta to give up on the Metaverse. The market hates innovation - until its successful, then loves it. Meta making such a big bet on the future, win or lose, is inspiring.

warabe 4y ago
Yeah, it is Mark's company after all, so if he wants to invest into the future, then go for it.
- akho 4y ago
  Meta is not “Mark’s company”. It’s publicly traded and has millions of shareholders who do not support this silliness. For now, the main reaction is to sell (leading to the valuation drop).
  - jbverschoor 4y ago
    It IS Mark’s company in tens of control. The stock price doesn’t affect meta, unless they want to raise money
    - kweingar 4y ago
      The stock price affects Meta employees, who might not want to sacrifice large chunks of TC on this bet.
  - bradleyjg 4y ago
    They should have considered that before investing in a multi-share class company.
SrslyJosh 4y ago
He spent $15 billion to make a shitty ghost of a Second Life clone. That's not innovation.
- _5uxp 4y ago
  Seriously, where is the real product for that money? How did they spend that much?
  - thefounder 4y ago
    I can definitely see how you can spend lots of resources building a new platform. I could spend years developing/interating over a "simple" cms. Big projects such VR are hard to get right. It's both a hardware and software problem and Zuck's timming may not work in his favor(he may be too early on VR)
  - tkk23 4y ago
    Some comments have mentioned that the money went into company acquisitions. I don't have a source for that.
- redox99 4y ago
  I don't know if you're being facetious or what, but of the 15B spent on Reality labs obviously only a fraction went to Horizon Worlds.
  - crazygringo 4y ago
    Yes but Horizon Worlds is literally the "metaverse" that they named the whole company after. That's the flagship product it's all for. It's not some accessory app, it's the main thing. Yikes.
    - zdyn5 4y ago
      Metaverse != Horizon Worlds
      - spoils19 4y ago
        Can you explain what the Metaverse is then?
JumpCrisscross 4y ago
> market hates innovation $100bn. One. Hundred. Billion. Do you really think this is an efficient allocation of resources? Here's a thought: Zuckerberg is worth $30 to 40bn [1]. Let's take $10bn of that and let Zuckerberg personally invest that in start-ups. Which team do you think will innovate more? Facebook burning ten times that? Or $10bn fronting founders? [1] https://www.forbes.com/profile/mark-zuckerberg/ https://www.forbes.com/profile/mark-zuckerberg/
crazygringo 4y ago
> The market hates innovation - until its successful, then loves it. What are you even talking about? Huge VC funding is predicated entirely on innovation before proving success. The market loves innovation... when it actually makes some kind of coherent sense. > Meta making such a big bet on the future, win or lose, is inspiring No it's not inspiring, it's idiotic. That's like saying "I bet my house and my kids' college money on a new crypto coin, but win or lose, it's inspiring!" It's not inspiring, it's just irresponsible.
- unityByFreedom 4y ago
  Best comment I saw on this was it's like trying to reinvent VR. We already have VR. Incrementally, maybe there will be some sort of popular VR chat down the road, but it's just too expensive at this point for mass adoption. The distance between getting a Twitter account and hopping on the Metaverse is over $500.
  - aaron695 4y ago
  - aliqot 4y ago
    It's like trying to reinvent Google Lively.
  - mypalmike 4y ago
    > it's just too expensive at this point for mass adoption The problem in every hype cycle of VR is never price. It's strapping a chunk of plastic to your head and blocking out the real world. I see something like Google Project Starline as being a better bet for "mass adoption" in the application space that meta is aiming for.
    - unityByFreedom 4y ago
      Good point, and thanks for sharing Starline. I hadn't heard of that. I'd love to see a "Minority Report"-like interface in the form of Starline + Kinect. Oh, and with electronic ink to save my eyes. Thank you, future.
3np 4y ago
While the article does mention the latest earnings report as part of the story, it's about valuation going down. Title is incorrect and misleading.
grey-area 4y ago
I love that you use the word hysteria, which has a long history of misuse. The fall in value is entirely justified - Meta has sucked for a while, has no moat, and has begun its slow slide into irrelevance like myspace etc before it. In addition revenue is down everywhere due to the coming recession and at ad-driven companies most of all. This will continue for a while. As to the bet on a metaverse, this idea comes from the 80s, and Meta has executed remarkably poorly on it - who can forget the legless avatars. Not even their own employees want to use it: https://www.ndtv.com/world-news/inside-a-meta-virtual-reality-meeting-floating-legless-avatars-of-you-3424373 https://www.ndtv.com/world-news/inside-a-meta-virtual-realit...
kotlin2 4y ago
Large public companies aren't innovators. Innovations requires risk. Meta is a huge part of retirement portfolios and pensions, which are extremely risk averse. There is an expectation that the company is going to do an efficient job at extracting profits. If Meta isn't meeting that expectation, the market reaction is to be expected .
- SturgeonsLaw 4y ago
  Yeah, the traditional move for a company of Facebook's size would be to pivot from a growth play to a value play, and focus on value extraction. Perhaps even - gasp! - pay dividends. This would have been a lot more appealing to the big insto funds and potentially bouyed the share price. The current plunge we're seeing is a vote of no confidence from the market.
  - thehappypm 4y ago
    Alphabet does this in an investor friendly way. Separate out the “bets”, keep them relatively small, but allow them to run for years.
kumarvvr 4y ago
I thought VC use their money to vote on innovation, and risky ones at that.
- jbverschoor 4y ago
  Gamble. VCs gamble, and the consumers/customers vote
jnwatson 4y ago
Meta has spent $30 billion on Reality Labs so far. To put that in perspective, I’ve seen an estimated cost of setting up a small colony on Mars to be that much. Even to get a conservative 10% ROI (super low for the level of risk they are taking), they’d need to net $3 billion a year. I can’t think of any scenario where that is possible any time soon.
MauroIksem 4y ago
Ok mark
Zigurd 4y ago
> The market hates innovation - until its successful, then loves it. Debatable. ARK's Tesla forecasts lean heavily on robotaxi revenue and value creation. The valuation to private investors in SpaceX depends very heavily on Starlink becoming a global telecom giant because rockets by themselves would never be so valued. Without that belief in a future, those companies would be worth far far less. What happened to Meta is that the potential of the metaverse turned out to be way too similar to a second Second Life. As long as Starlink isn't perceived as a second Iridium, it will have access to cheap capital.
ulfw 4y ago
The market has never hated innovation. Very much the opposite. What do you think Growth stocks are (i.e. valued on innovation/future potential) vs Value stocks (valued on more intrinsic/today's value). The market hates not being sold on a story. And honestly Zuckerberg completely failed to sell the public on the metaverse. We've had VR worlds for a decade plus. Noone used them. Horizon Worlds is the same thing, but monetized. And extremely expensive to build for some odd reason and with basically no users.

warabe 4y ago

Yeah, it is Mark's company after all, so if he wants to invest into the future, then go for it.

akho 4y ago
Meta is not “Mark’s company”. It’s publicly traded and has millions of shareholders who do not support this silliness. For now, the main reaction is to sell (leading to the valuation drop).
- jbverschoor 4y ago
  It IS Mark’s company in tens of control. The stock price doesn’t affect meta, unless they want to raise money
  - kweingar 4y ago
    The stock price affects Meta employees, who might not want to sacrifice large chunks of TC on this bet.
- bradleyjg 4y ago
  They should have considered that before investing in a multi-share class company.

SrslyJosh 4y ago

He spent $15 billion to make a shitty ghost of a Second Life clone. That's not innovation.

_5uxp 4y ago
Seriously, where is the real product for that money? How did they spend that much?
- thefounder 4y ago
  I can definitely see how you can spend lots of resources building a new platform. I could spend years developing/interating over a "simple" cms. Big projects such VR are hard to get right. It's both a hardware and software problem and Zuck's timming may not work in his favor(he may be too early on VR)
- tkk23 4y ago
  Some comments have mentioned that the money went into company acquisitions. I don't have a source for that.
redox99 4y ago
I don't know if you're being facetious or what, but of the 15B spent on Reality labs obviously only a fraction went to Horizon Worlds.
- crazygringo 4y ago
  Yes but Horizon Worlds is literally the "metaverse" that they named the whole company after. That's the flagship product it's all for. It's not some accessory app, it's the main thing. Yikes.
  - zdyn5 4y ago
    Metaverse != Horizon Worlds
    - spoils19 4y ago
      Can you explain what the Metaverse is then?

JumpCrisscross 4y ago

> market hates innovation $100bn. One. Hundred. Billion. Do you really think this is an efficient allocation of resources? Here's a thought: Zuckerberg is worth $30 to 40bn [1]. Let's take $10bn of that and let Zuckerberg personally invest that in start-ups. Which team do you think will innovate more? Facebook burning ten times that? Or $10bn fronting founders? [1] https://www.forbes.com/profile/mark-zuckerberg/ https://www.forbes.com/profile/mark-zuckerberg/

crazygringo 4y ago

> The market hates innovation - until its successful, then loves it. What are you even talking about? Huge VC funding is predicated entirely on innovation before proving success. The market loves innovation... when it actually makes some kind of coherent sense. > Meta making such a big bet on the future, win or lose, is inspiring No it's not inspiring, it's idiotic. That's like saying "I bet my house and my kids' college money on a new crypto coin, but win or lose, it's inspiring!" It's not inspiring, it's just irresponsible.

unityByFreedom 4y ago
Best comment I saw on this was it's like trying to reinvent VR. We already have VR. Incrementally, maybe there will be some sort of popular VR chat down the road, but it's just too expensive at this point for mass adoption. The distance between getting a Twitter account and hopping on the Metaverse is over $500.
- aaron695 4y ago
- aliqot 4y ago
  It's like trying to reinvent Google Lively.
- mypalmike 4y ago
  > it's just too expensive at this point for mass adoption The problem in every hype cycle of VR is never price. It's strapping a chunk of plastic to your head and blocking out the real world. I see something like Google Project Starline as being a better bet for "mass adoption" in the application space that meta is aiming for.
  - unityByFreedom 4y ago
    Good point, and thanks for sharing Starline. I hadn't heard of that. I'd love to see a "Minority Report"-like interface in the form of Starline + Kinect. Oh, and with electronic ink to save my eyes. Thank you, future.

3np 4y ago

While the article does mention the latest earnings report as part of the story, it's about valuation going down. Title is incorrect and misleading.

grey-area 4y ago

I love that you use the word hysteria, which has a long history of misuse. The fall in value is entirely justified - Meta has sucked for a while, has no moat, and has begun its slow slide into irrelevance like myspace etc before it. In addition revenue is down everywhere due to the coming recession and at ad-driven companies most of all. This will continue for a while. As to the bet on a metaverse, this idea comes from the 80s, and Meta has executed remarkably poorly on it - who can forget the legless avatars. Not even their own employees want to use it: https://www.ndtv.com/world-news/inside-a-meta-virtual-reality-meeting-floating-legless-avatars-of-you-3424373 https://www.ndtv.com/world-news/inside-a-meta-virtual-realit...

kotlin2 4y ago

Large public companies aren't innovators. Innovations requires risk. Meta is a huge part of retirement portfolios and pensions, which are extremely risk averse. There is an expectation that the company is going to do an efficient job at extracting profits. If Meta isn't meeting that expectation, the market reaction is to be expected .

SturgeonsLaw 4y ago
Yeah, the traditional move for a company of Facebook's size would be to pivot from a growth play to a value play, and focus on value extraction. Perhaps even - gasp! - pay dividends. This would have been a lot more appealing to the big insto funds and potentially bouyed the share price. The current plunge we're seeing is a vote of no confidence from the market.
- thehappypm 4y ago
  Alphabet does this in an investor friendly way. Separate out the “bets”, keep them relatively small, but allow them to run for years.

kumarvvr 4y ago

I thought VC use their money to vote on innovation, and risky ones at that.

jbverschoor 4y ago
Gamble. VCs gamble, and the consumers/customers vote

jnwatson 4y ago

Meta has spent $30 billion on Reality Labs so far. To put that in perspective, I’ve seen an estimated cost of setting up a small colony on Mars to be that much. Even to get a conservative 10% ROI (super low for the level of risk they are taking), they’d need to net $3 billion a year. I can’t think of any scenario where that is possible any time soon.

MauroIksem 4y ago

Ok mark

Zigurd 4y ago

> The market hates innovation - until its successful, then loves it. Debatable. ARK's Tesla forecasts lean heavily on robotaxi revenue and value creation. The valuation to private investors in SpaceX depends very heavily on Starlink becoming a global telecom giant because rockets by themselves would never be so valued. Without that belief in a future, those companies would be worth far far less. What happened to Meta is that the potential of the metaverse turned out to be way too similar to a second Second Life. As long as Starlink isn't perceived as a second Iridium, it will have access to cheap capital.

ulfw 4y ago

The market has never hated innovation. Very much the opposite. What do you think Growth stocks are (i.e. valued on innovation/future potential) vs Value stocks (valued on more intrinsic/today's value). The market hates not being sold on a story. And honestly Zuckerberg completely failed to sell the public on the metaverse. We've had VR worlds for a decade plus. Noone used them. Horizon Worlds is the same thing, but monetized. And extremely expensive to build for some odd reason and with basically no users.