"Big Short" Michael Burry Says Facebook Has a Big Problem - TheStreet

The database of critics and detractors of Mark Zuckerberg is increasing time by day. 

There is, of course, the fiscal community, analysts and investors, who are merciless astir Meta Platforms  (META) , the entrepreneur's empire of societal networks.

Meta shares are down 62.3% since January, reflecting a autumn successful marketplace worth of astir $570 billion.

There are his billionaire peers, Elon Musk and Mark Cuban, who mock him. Musk nicknamed him "Zuck the Fourteenth" -- an evident notation to the French king, celebrated for his hubris and excess, Louis XIV.

Billions of Losses

Zuckerberg's strategy is what unites each these critics. 

The Chief Executive Officer has envisioned metaverse arsenic the aboriginal of his company, which includes Facebook, WhatsApp and Instagram. Metaverse is an immersive satellite successful which we volition person a parallel beingness via avatars, utilizing tools specified arsenic virtual world headsets and leveraging precocious technologies similar augmented reality. 

To quell the past doubts, Zuckerberg changed the sanction of his institution from Facebook to Meta Platforms. He flooded Reality Labs, the part processing this metaverse wrong Meta Platforms, with billions of dollars. 

As of June 30, astir $16 cardinal had already been injected into his imaginativeness of the aboriginal for a mediocre result. Reality Labs recorded a second-quarter operating nonaccomplishment of $2.81 billion. In the archetypal fractional of 2022, losses amounted to $5.8 billion. 

In each of 2021, Reality Labs had a nonaccomplishment of $10.2 billion.

The representation prime of metaverse, Horizon Worlds, is reminiscent of outdated exertion alternatively than the future. Investors are starting to suffer patience. The media sum has been negative.

Many are speedy to accidental that the Metaverse is Zuckerberg's biggest mistake. The billionaire, whose idiosyncratic luck has shrunk by much than $77.7 cardinal since January, continues to plead patience.

But for legendary capitalist Michael Burry, determination should beryllium nary doubt: Meta is becoming the New Coke. 

Burry is known to person bet, with bully reason, connected the illness of the subprime indebtedness marketplace which led to the fiscal situation of 2008. He is besides 1 of the fewer to person predicted the existent rout of the markets.

"Seems Meta has a New Coke Problem," Burry posted connected Twitter connected October 15.

The investor, who runs hedge fund Scion Asset Management, seems to suggest that Meta is simply a large mistake made by Zuckerberg. And that it is apt that helium volition marque a large U-turn. Basically, Meta should instrumentality to Facebook and what it does best: societal media.

New Coke is simply a overmuch sweeter mentation of the celebrated Coca-Cola. This portion was introduced by Coca-Cola successful April 1985 during a warfare with Pepsi. 

In 1985, Coca-Cola had been losing market share to PepsiCo. Blind sensation tests indicated that consumers seemed to similar the sweeter sensation of rival Pepsi-Cola. The institution decided truthful to reformulate its recipe. 

New Coke was past introduced successful April. It left a sour sensation successful the mouths of loyal Coca-Cola customers. Within weeks of the announcement, the institution was receiving 5,000 aggravated telephone calls a day. In June, that fig jumped to 8,000 calls a day, a measurement that forced the institution to prosecute further telephone operators. Consumers went truthful acold arsenic to record a ailment against the institution to unit it to supply the aged drink. 

The outrage took Coca-Cola executives by surprise. 

Seventy-nine days aft their archetypal announcement, Coca-Cola held a property league connected July 11, 1985 to connection a mea culpa and denote the instrumentality of the archetypal Coca-Cola classical formula.

So acold Zuckerberg doesn't look consenting to springiness up connected metaverse. In fact, the institution conscionable revealed a caller virtual world headset selling for $1,500. Dubbed the Meta Quest Pro, the headset volition beryllium shipped from October 25.

The billionaire besides promised caller and cheaper headsets.

"I deliberation there’s going to beryllium a user instrumentality similar Quest 2 and Quest 3, the adjacent procreation that we’re moving on, we’re not releasing it close now," helium said successful an interrogation with Ben Thompson’s Statechery newsletter.

He added, "it’s not this year, but determination volition beryllium a Quest 3 and that’s successful the terms scope of $300, $400, oregon $500, that zone."