Mark Zuckerberg’s pivot into the metaverse has cost him dearly in the real world.
Even in a rough year for just about every US tech titan, the wealth erased from the chief executive officer of Meta Platforms Inc. stands out. His fortune has been cut in half and then some, dropping by $71 billion so far this year, the most among the ultra-rich tracked by the Bloomberg Billionaires Index. At $55.9 billion, his net worth ranks 20th among global billionaires, his lowest spot since 2014 and behind three Waltons and two members of the Koch family.
It was less than two years ago when Zuckerberg, 38, was worth $106 billion and among an elite group of global billionaires, with only Jeff Bezos and Bill Gates commanding bigger fortunes. His wealth swelled to a peak of $142 billion in September 2021, when the company’s shares reached as high as $382.
The following month, Zuckerberg introduced Meta and changed the company’s name from Facebook Inc. And it’s been largely downhill from there as it struggles to find its footing in the tech universe.
Its recent earnings reports have been dismal. It started in February, when the company revealed no growth in monthly Facebook users, triggering a historic collapse in its stock price and slashing Zuckerberg’s fortune by $31 billion, among the biggest one-day declines in wealth ever. Other issues include Instagram’s bet on Reels – its answer to TikTok’s short-form video platform – even though it’s worth less in advertising revenue, while the industry overall has been affected by lower marketing spending due to concerns over an economic slowdown.
The stock is also being dragged down by the company’s investments in the metaverse, said Laura Martin, senior internet analyst at Needham & Co. Zuckerberg has said he expects the project will lose “significant” amounts of money in the next three to five years.
In the meantime, Meta “has to get these users back from TikTok,” said Martin. It’s also hampered by “excessive regulatory scrutiny and intervention,” she said.
The Menlo Park, California-based company is faring worse in 2022 than most of its FAANG peers. It’s down about 57% this year, far more than the declines of 14% for Apple Inc., 26% for Amazon.com Inc. and 29% for Google parent Alphabet Inc. Meta is even narrowing the gap in 2022 losses with Netflix Inc., which is down about 60%.
If not for its endeavor into virtual reality, the social media giant “would be more in line with where Alphabet is,” said Mandeep Singh, technology analyst at Bloomberg Intelligence. Meta could circumvent this issue by spinning off some of its other businesses, like WhatsApp or Instagram, he said.
Almost all of Zuckerberg’s wealth is tied up in Meta stock. He holds more than 350 million shares, according to the company’s latest proxy statement. The price was little changed at $146.18 at 12:22 pm in New York.
Zuckerberg has attempted a rebranding of sorts. He recently uploaded a video of himself practicing mixed martial arts and repeatedly referred to himself as a “product designer” in a three-hour conversation on Joe Rogan’s podcast.
(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)