Meta has invested over $15 billion in developing the metaverse world through its Reality Labs initiative since the beginning of last year.
However, the company has not disclosed specific details regarding where this substantial amount of money has been spent. This lack of transparency from Meta has caught the attention of analysts.
Dan Ives, a tech analyst at Wedbush Securities, expressed concern, stating, “The issue here is the expenditure without transparency to investors. This remains a high-risk venture for Zuckerberg and his team, as they are channeling funds into future prospects while their core business faces challenges.”
Since Meta started releasing financial information for Reality Labs last year, it reported spending over $10 billion. In the first six months of 2022 alone, the company has registered losses exceeding $5 billion for this segment.
Meta, while declining to comment on this issue, had a spokesperson mention that financial specifics for the Reality Labs division are not publicly disclosed.
Ives highlighted the alarmingly high expenditure by Meta on the metaverse initiative. Similarly, Mark Zgutowicz, an analyst at Benchmark, underscored the lack of clarity in Meta’s spending, deeming the investment as risky.
Ivan Feinseth, a technology analyst at Tigress Financial Partners, however, expressed confidence in Mark Zuckerberg’s long-term vision for the metaverse. He drew a parallel with Facebook’s acquisition of Instagram, recalling initial skepticism about the deal, which ultimately proved to be highly successful.
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