Why a new Metaverse ETF will have nothing to do with Facebook’s Meta

Facebook’s parent company, Meta (FB), wants to be the first company you think of when you hear the word metaverse, the burgeoning virtual 3D world that could be the future of the Internet. Heck, that’s why Meta CEO Mark Zuckerberg changed the name of the social media giant 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 Metaverse,” Auerbach told Yahoo Finance Live.

In fact, the CIO is so confident in its thesis that it has taken a permanent short position in Meta stocks and voluntarily excluded it from Subversive Capital’s new meta-focused ETF Punk (PUNK).

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

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

Meta is investing billions of dollars in its plans to turn the company into an empire with metavers. Metaverse’s metaverse division, called Reality Labs, lost $ 20 billion in 2021. Alone, these investments are not expected to pay off in some time.

During Meta’s earnings call on April 27, Zuckerberg tried to address investors’ concerns about how much the company is spending on its Metaverse investments, saying it will slow down Metaverse consumption 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 is expensive to build this – it’s something that has never been built before and it’s a new paradigm for computers and social connectivity.

According to Auerbach, the problem with Meta is that consumers will turn to other companies when they experience Metaverse. In fact, Meta may be struggling to maintain user trust, especially after revelations from Facebook whistleblower Frances Haugen that the company has turned a blind eye to a wide range of issues – from the divisive website to human trafficking in developing countries.

“They’re looking for more immersive experiences, but there’s a real concern about whether the Facebook platform is where people want the future of their lives to be,” Auerbach said.

Meta CEO Mark Zuckerberg focuses the company’s future on growing the meta-verse. (AP Photo / Alex Brandon)

Meta is currently working on a number of new virtual reality and augmented reality headsets in addition to its existing Quest 2..

However, meta is not the only metavers that play. The online gaming platform “Roblox” has its own type of metavers, 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 the hope that it will become as important as smartphones today.

So far, the meta-verse is still pretty much a niche product category. Whether it explodes and consumers are sucked into it remains to be seen. But if that is the case, Auerbach hopes Meta will not be among them.

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Do you have any advice? Send an email to Daniel Howley at dhowley@yahoofinance.com. Follow him on Twitter at @DanielHowley.

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