As Meta Ditches FB Ticker, Investors Shun Metaverse
Wall Street is pounding the table on the next big thing in technology, predicting the metaverse could be a $13 trillion industry by the end of the decade. Investors remain to be convinced.
Investing in the building blocks of the metaverse -- digital worlds where users can socialize, play games and conduct business -- or in companies that help create the experience, are viable early investment opportunities, Andre Lin, a Citigroup Inc. analyst, said in a note this week. He pegs the size of the industry at $8 trillion to $13 trillion by 2030.
Facebook’s parent company, one of the biggest corporate proponents of the new world, changed its name to Meta Platforms Inc. in October and pledged billions of dollars of metaverse investments. The next step in the transformation came Thursday, when the company changed its stock symbol to META from FB. The stock was little changed as it traded on its new ticker.
For now, though, skepticism is high: The Roundhill Ball Metaverse ETF, the biggest of the seven U.S. exchange-traded funds that aim to capitalize on the trend, has plunged 39% in the past year. Meta shares have collapsed by almost half from their 2021 peak.
The risk is that the promise of a new world turns out to be overblown hype that costs investors billions, as was the case with e-commerce in the late 1990s and cannabis and the blockchain more recently. It’s still not clear that social media users will shift to the new technology, and if they do, how soon advertisers will follow, said Morningstar Investment Service’s Ali Mogharabi.