Why a new metaverse ETF wants nothing to do with Facebook’s Meta

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Facebook parent company Meta (FB) wants to be the first company you think of when you hear the word metaverse, the nascent virtual 3D world that could be the future of the internet. Heck, that’s why Meta CEO Mark Zuckerberg changed the social media giant’s name to Meta in late 2021.

But according to Subversive Capital founder and CIO Michael Auerbach, Zuckerberg’s efforts will fail.

“We actually believe that Meta is not the company building the Metaverse,” Auerbach told Yahoo Finance Live.

The CIO is so certain of its thesis, in fact, that it has taken a permanent short position in Meta shares and voluntarily excluded it from Subversive Capital’s new metaverse-focused ETF Punk (PUNK).

“When we launched our metaverse ETF, we were considering other…metaverse ETFs out there and we’re the only actively managed metaverse ETF,” Auerbach said.

“We include companies that build the infrastructure and applications for an interoperable metaverse that consumers want. And today’s consumers don’t want Meta, Facebook or Mark Zuckerberg to be guardians of their digital future.

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Meta invests billions of dollars in its plans to turn the company into a metaverse-powered empire. Meta’s metaverse division, called Reality Labs, lost $20 billion in 2021 alone. And those investments aren’t expected to pay off for some time.

During Meta’s April 27 earnings call, Zuckerberg tried to address investor concerns about how much the company spends on its Metaverse investments, saying it will slow down Metaverse spending going forward. while guaranteeing the profitability of its Family of Apps activity.

“At Reality Labs, we are making significant investments to deliver the next platform that I believe will be extremely important to both our mission and our business, comparable in value to today’s leading mobile platforms. today. I recognize that it’s expensive to build this – it’s something that’s never been built before and it’s a new paradigm for computing and social connection.

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According to Auerbach, the problem with Meta is that consumers will turn to other companies when they experience the Metaverse. Indeed, Meta may struggle to maintain user trust, particularly following revelations from Facebook whistleblower Frances Haugen that the company has turned a blind eye to a host of issues – from the site fueling the division to human trafficking in developing countries.

“They’re looking for more immersive experiences, but there’s a real concern about whether or not the Facebook platform is where people want the future of their lives to be,” Auerbach said.

Facebook CEO Mark Zuckerberg pauses as he testifies before a joint Commerce and Justice Committee hearing on Capitol Hill in Washington, Tuesday, April 10, 2018, about Facebook's use of data to target American voters in the 2016 election. (AP Photo/Alex Brandon)

Meta CEO Mark Zuckerberg is focusing the company’s future on growing the metaverse. (AP Photo/Alex Brandon)

Meta is currently working on a number of new virtual reality and augmented reality headsets aside from its existing Quest 2. .

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Meta isn’t the only metaverse to play, however. Online gaming platform “Roblox” has its own type of metaverse where users can move their characters between different interconnected worlds, while Epic’s “Fortnite” has evolved from a shooter to a place where friends can meet and watch concerts together.

Microsoft, Sony, Google, Nvidia and many other companies are also investing in the technology in hopes that it will be as important as smartphones today.

For now, the metaverse is still largely a niche product category. Whether it explodes and consumers are sucked into it remains to be seen. But if that’s the case, Auerbach hopes Meta won’t be among them.

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Do you have any advice? Email Daniel Howley at [email protected] Follow him on Twitter at @DanielHowley.

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