Major investors in Meta have expressed anger over Mark Zuckerberg's plans for the Metaverse as the company's shares continue to decline in an unprecedented manner, according to a Financial Times report.
The company has lost more than 70% of its value since Mark Zuckerberg announced his company name change to Meta with a focus on building metaverses. And last week; Meta shares tumbled 24% after presenting its quarterly earnings report, hitting their lowest level in nearly four years after an earnings report described as disastrous by a Wall Street analyst.
Despite all these losses, Zuckerberg said, "He intends to spend billions more on the Metaverse project next year." Whereas he has already pumped $15 billion into the project this year alone.
“If any other company did this, you would have active investors writing letters, proposing alternate lists of directors, and demanding change,” Jim Tierney, chief US development finance officer at Alliance Bernstein and a Meta contributor, told the Financial Times. But I think Mark heard very clearly what the investors wanted and still made his decision.”
Investors have expressed exasperation and frustration in their meetings with Meta CEOs, some of whom spoke with Zuckerberg over the past week. But Tierney said, "The earnings follow-up meetings made people more angry, not less."
"They spend $15 billion a year on metaviruses and they can't give us any signs of progress," he said. "It's just a dream."
While a Meta spokesperson told FT: “We focus execution on key priorities with a focus on creating long-term shareholder value. We value our investors' feedback and interact with them regularly; To make sure we are aware of their respective views.”
It's not uncommon for public companies to hold meetings with major shareholders after quarterly earnings reports, but Zuckerberg's tight control over the company means he essentially has complete veto power over other shareholders when it comes to the company's future.
The Facebook founder owns 55% of the company's voting class shares, meaning he can direct the company as he sees fit without too much concern about shareholder resistance.
Meta also has a dual-class stock structure that provides Zuckerberg, CEOs, and select directors with veto and veto voting power; Since one of their shares equals 10 votes, other shareholders are limited to one vote per share.
The latest FT report came after another investor published an open letter ahead of the company's quarterly earnings report, saying: "Meta has lost investor confidence." Brad Gerstner, whose fund Altimeter Capital owns hundreds of millions of dollars worth of Meta stock, suggested in the letter that Meta limit its investment in its Metaverse venture to no more than $5 billion annually.
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