I feel like this is the thousandth time I’ve spoken about Meta Platforms [FB] and the metaverse, but I’m officially vowing to not call it Facebook anymore.
More pressing than Mark Zuckerberg’s naming preferences, however, is the fact that we’re running out of reasons to defend Meta stock as an investment.
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Retreat from the metaverse.
Meta has had a horrendous year thus far. A first-ever decline in users, a slew of regulatory battles, and a historically large single-day loss of value on the stock market have made for an uncomfortable start to 2022.
Added to this, the firm is now all-in on its overhaul towards the metaverse. While some investors are bullish about this focus on novel technology, some big questions remain to be addressed.
One of the largest issues facing Meta’s vision is the current state of modern telecom networks. According to the company’s VP of connectivity, Dan Rabinovitsj:
“Making the metaverse a reality will require significant advancements in network latency, symmetrical bandwidth and overall speed of networks.”
As it turns out, creating a real-time, immersive, virtual world requires network power that we’ve never come close to needing before. In many ways, it sounds like Meta may have put the horse before the cart on this one.
Forward thinking is admirable, and predicting the future of technology is something only a handful of people in the world can feasibly do — Meta’s leadership are certainly among these. But, rebranding your company around a technology that requires an entire industry — one that’s outside of your control — to innovate faster than ever could be a costly mistake.
The “massive advances in connectivity” Zuckerberg needs may be a bridge too far right now for a company needing a win. Meta has put all its eggs in one basket here, and that basket is teetering on the edge of a cliff.
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