Many tech founders have fallen from their lofty positions in billionaire’s Valhalla.
Credits: Business Insider
Once held in high regard, tech companies are facing the brunt of the impact of interest rate hikes and a waning interest in the sector plagued by mismanagement and scandals.
Meta will be laying off 11,000 jobs, one of the highest layoffs in this quarter alone. At the same time, Twitter has laid off about 50% of their workforce after Elon Musk’s takeover. This was in a bid to reduce costs and an attempt to streamline the business.
What could be the reason for this decline?
Many tech companies depend on a consistent flow of money from advertisers. However, advertisers have been cutting back with rising interest rates and reduced consumer spending. This affected a huge chunk of revenue.
Furthermore, companies like Meta are in a tight spot. Its advertising business is hugely impacted by security updates on the iOS platform that allows users to block activity tracking by apps. Thus, the accuracy of Meta’s algorithm becomes primarily affected.
At the same time, large tech companies face increased competition from overseas rivals such as TikTok.
Generally based in the US, tech companies have been enjoying a long-withstanding dominance over the market.
However, emerging markets such as China are developing apps that could soon take up a considerable portion of the sector.
However, I believe we cannot solely blame these downfalls on external factors alone.
They Only Have Themselves to Blame?
Meta’s rebranding process to shift its focus from a social media-driven company to focusing on the metaverse has not paid off.
The company has thrown billions of dollars into developing the metaverse but has consistently failed to produce a pleasing platform for consumers.
Known to many, the idea of the metaverse has yet to prove itself to be a beneficial endeavour with significant ROI. However, Meta continues to market the idea as a reasonable project that is considered the future of social media and technology.
Meta’s metaverse products have consistently fallen flat. Horizon World’s landscape is found to be left empty, with only a few worlds being repeatedly visited by more than 50 users.
And yet, the company continues to throw money in that direction.
Is this a sign of desperation?
Meta’s attempts to develop the metaverse might be their solution to create a platform where they are in control; a solution to the iOS problem, perhaps?
Thus, I think it is their best interest to make the metaverse work. But, looking at its current state, there is still a long way to go.
Complaining is Different Than Running It
Twitter’s seemingly slow implosion might be Musk’s biggest failure. I’m all for Elon Musk, but I would think that this time, he has bitten off more than he can chew.
Managing a social media platform is different from complaining about it on that same platform.
However, I applaud his lofty dreams, but implementing them would be a different story. The world is already as divided as it is, and it would be difficult to appease everyone.
Twitter’s problem is not a simple problem with a single solution. We will never know how to move forward, so let us wait and see.
Crypto is a PONZI
The crypto space can be simply said to be decimated.
After the announcement on Twitter of FTX’s bankruptcy filing, it seems that institutional interest and investors’ confidence in the technology has waned.
The implosion caught many by surprise, with even the biggest institutions and investors fooled by Sam Bankman-Fried’s humble outlook. Temasek Holdings, a government-owned investment firm in Singapore, has invested as much as $205 million into the company.
This implosion has sent shockwaves across the sector, with some predicting that other companies, such as Crypto.com to be next in line to go under.
Thus, would this be the end for crypto?
This is a massive setback for the technology, with many claiming that it is no more than a giant Ponzi scheme.
And I do not blame them.
Coffeezilla made it clear in his videos that so many were fooled and did not do their due diligence because of their own greed. FTX dangled a massive carrot in front of their faces, and they bit, hard.
Old Man Wins the Race
As all these chaos and scandals unravel in the tech space, one old man continues to trudge slowly forward.
Over time, considered the uncool old geezer, he beat the young ones in the race.
Warren Buffet beats the tech bros in the stock market.
Warren Buffett overtakes Mark Zuckerberg as tech fortunes slide By Devon Pendleton (Bloomberg) - Warren Buffett is once again richer than Mark Zuckerberg, a reminder of the enduring…
Once again, Buffett is richer than Zuckerberg. He is the only person amongst the world’s 10 richest that has his net worth grow YTD.
It shows how powerful value-investing and dollar-cost averaging are.
So what does this mean?
The tech space is a mess. Nobody knows what they are doing, and everyone seems to be standing on thin ice. Everyone is afraid that the ice could break at any moment.
It also shows that the tried and true value-investing method and dollar-cost averaging work most of the time. At a time like this, when the economy is highly turbulent, keeping it simple with no frills seems to be the best way to go.
New technology will always be a risky bet. However, I do not deny that having faith can sometimes pay.
I will not be surprised if some tech bros can turn their companies around and make them successful again. It will just take some time.
Till then, we have to hold on tight.
$Meta Platforms, Inc.(META)$ $Berkshire Hathaway(BRK.B)$ $Apple(AAPL)$ $AMD(AMD)$ $Amazon.com(AMZN)$
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