Opening Bell

Timothy Lesko

here with more Tim Lesko Director and senior wealth advisor at Mariner wealth advisors. Thanks for joining us, how my metas rebranding, not to mention of course it's multibillion dollar investment in the metaverse be reflected in this earnings report. I don't think we're going to see a whole lot reflected in the short term. The metaverse is still mostly an idea. There were some stories yesterday about how people were buying islands in the, in the metaverse, the focus really should be on how profitable were they in the quarter and they continued to see add growth and add growth is really what drives companies like this in the social media world, it's all about user engagement and as long as user engagement stays, I see no reason to really worry about other investments, they might make your future products interesting. Do you anticipate there could be a dip in the stock value just because a lot of investors may be bullish on the metaverse and hoping for much more of a road map to come from management? Well, I think when companies change their name and I think when you have a digital space that is starting to get so large that the percentage growth numbers continue to decline only because you're talking about such big numbers. So the law of large numbers catches up to this space and the era of you know, double digit, sometimes triple digit growth in some of the core businesses is probably behind us hard to say that people are really going to worry about an area of the business that really isn't there yet. Almost every company in this space has changed their name to more accurately reflect what they are and I would argue that there are more of a platform company that probably would have been a better name change for the company. Yeah, and tim we talk about profitability and kind of the importance for meta to show some growth in revenue here. Meta has taken a hit from Apple's recent privacy changes. It allows users to opt out of letting apps track them at least the IOS users, How important do you think it is that meta puts out guidance that it is navigating these new rules. I think those standard rules from the platforms that these social media companies play on as well as you know now, years old changes in european data privacy regulations and the expectation that someday we might, you know, adapt some of those private privacy regulations here in the states means that advertising dollars are going to continue to be the focus across all social media and digital advertising platforms. Whether or not the lack of consumer data begins to affect the ad breaks that they're able to charge. Hasn't really shown in yet in any of these companies. So still seems like ad dollars are moving from traditional media to digital and that will continue to make up for any reduction in rates based on the data. We'll definitely be watching that closely meta also reporting financial results for two sectors, its family of apps like facebook instagram and WhatsApp and also reality labs, what do you think it is that investors are watching in this new segment? Well, when you look at new segments and this has been the case in technology for decades, there's always the next big thing and everybody wants to see the companies that they invest in continuing to use some of the cash flow from the existing profitable businesses to make sure they're investing in the future. That's the nice thing about the technology business. Two decades ago there were no app stores two decades ago, there were no cellphones that you know the size of index card that act as everything in your life. So as long as they continue to stay current, I don't see that. Things like reality labs are going to be any sort of negative for the company. Um, but you know, five years ago everybody thought we were going to be watching three D televisions 24 hours a day and that did not come true so far. We haven't seen virtual reality or augmented reality play a particular role in our digital lives. So there's a lot on the promise with technology will focus on the casually generated by existing businesses. Yeah, let's talk about some of that promise and cash flow here. Real estate sales on the four major metaverse platforms topping 500 million in 2021, it could potentially double this year. Do you have any insight you can share with investors who may be wanting to look into real estate in the metaverse and what this segment could mean. I think the metaverse has a long way before, it is really a real estate business. I saw that news article yesterday A news put out by a company who sells real estate in the metaverse. So I have a hard time yet putting any real, you know, thought behind it and real estate prices at least in the real world are based on scarcity and these metaverse players are going to have to prove out that they are creating some sort of scarcity. Otherwise if you sold an island for $15,000 yesterday you can just create another island. That's great. Yeah, and I think that's why a lot or maybe bearish on real estate in the metaverse, but potentially a driver of growth when meta does adopt some of their futuristic envisioning for what this world could potentially be. I also want to ask you about Zuckerberg though, he has said his investment in the metaverse would not be profitable anytime in the near future. We've kind of been talking about this, uh do you think that investors are willing to stick around for when these visions come to fruition in the metaverse? And what do you think it is that meta needs to communicate moving forward in order to keep those investors on board. I think it's like any fast growth technology company. Right? We've seen it with their competitors. They want to make sure that these founders and their big ideas still have a focus on what their core businesses and continue to be put the resources. Also behind the core business is very hard to know what the metaverse is going to be. It could be a tremendous success, it could be a tremendous flop. The core business here is user engagement and selling advertising and that's what we will focus on across social media. And as technology is an industry that does not have on the software side, on the social platform side does not have supply chain problems. It does not have products sitting off of Long Beach and does not suffer from the same inflation pressures other than wage inflation. So more broadly, the tech sector has pretty good metrics when it faces some of the things that we're looking at in the economy. A lot of really good insight there. That's Tim Lesko director and senior wealth advisor at Mariner wealth advisors. Thanks so much for joining us