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Into the Metaverse: A look at FB, SNAP and others

By Joyanta Acharjee

16:29, 5 January 2022

Two users enjoy the metaverse with virtual reality headsets
The metaverse extends social media into a virtual 3D world – Photo: Shutterstock

Once the domain of science fiction writers, 2021 saw technology companies embrace a new digital frontier known as the metaverse, which is aimed at extending social media into a virtual 3D world. Capital.com looks at some pioneers in the space.

Meta Platforms

Facebook (FB) changed its name to Meta Platforms in October as the social media company pivoted into a virtual realm first thought up by sci-fi authors such as William Gibson and Neal Stephenson.

Gibson’s 1984 novel Neuromancer – part of a subgenre known as “cyberpunk” – described a virtual digital world accessed by hackers who could physically “jack in” using physical interfaces directly plugged into the human body. The concept was further refined in Gibson’s dystopian 1993 novel Virtual Light which involves a pair of virtual reality-enabled sunglasses. 

The “metaverse” first appeared in Stephenson’s 1992 novel Snow Crash as digital real estate accessed using virtual reality glasses.

Meta Platforms wants to turn the metaverse into reality by augmenting real-life experiences with virtual technology. Mark Zuckerberg’s company already owns virtual reality hardware, buying headset maker Oculus VR for $2bn (£1.5bn) in 2014. Now known as Meta Quest, the company offers two VR headsets for gaming.

As at 11:24 ET (UTC-5) FB was down 1% to $332.36 per share. Over the past six months, the stock is down almost 6%.

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Snap

Staying in the social media space Snap (SNAP), the maker of social media app Snapchat, has invested for a virtual future with its alternate reality (AR) Spectacles – smart sunglasses that capture video and display AR images. The first pair were released in 2016.

Snap’s AR service enables content creators to embed AR images into Snapchat content using software such as Lens Studio and Lens Web Builder

As at 11:25 ET (UTC-5) SNAP was down almost 2% to $43.23. Shares have fallen 38% over the past six months.

Microsoft

Microsoft (MSFT) is also part of the metaverse as its Teams communication software – formerly known as Skype for Business – has added a mixed-reality component known as Mesh. Instead of a video image, participants now join as a virtual “avatar” or representation of themselves in a virtual space. The service is set to begin in the first half of 2022.

The Redwood, Washington-headquartered company also offers the Hololens, a headset that is intended as an AR tool aimed at manufacturing and construction, medicine and the education sectors.

As at 11:25 ET (UTC-5) MSFT was down 2% to $322.59. Shares have gained 16% over the past six months.

Matterport

Staying with applied AR, Matterport (MTTR) is focused on spatial data with equipment that turns any physical space into an immersive 3D digital twin using its proprietary range of cameras. Founded in 2011, the company has over 330,000 subscribers in more than 170 countries who have digitised over five million spaces across industries which include construction and real estate, enabling prospective buyers to go on virtual property tours rather than rely on 2D pictures.

TSLA

176.83 Price
-1.570% 1D Chg, %
Long position overnight fee -0.0262%
Short position overnight fee 0.0040%
Overnight fee time 21:00 (UTC)
Spread 0.10

COIN

261.61 Price
+2.170% 1D Chg, %
Long position overnight fee -0.0262%
Short position overnight fee 0.0040%
Overnight fee time 21:00 (UTC)
Spread 0.31

AMD

182.01 Price
+1.640% 1D Chg, %
Long position overnight fee -0.0262%
Short position overnight fee 0.0040%
Overnight fee time 21:00 (UTC)
Spread 0.12

RDDT

52.67 Price
-8.080% 1D Chg, %
Long position overnight fee -0.0262%
Short position overnight fee 0.0040%
Overnight fee time 21:00 (UTC)
Spread 0.27

Last month the company announced it would redeem all warrants to buy its shares, potentially adding almost $80m to its balance sheet.

As at 11:26 ET (UTC-5) MTTR was down 6% to $17.12. Shares have added 12% over the past six months.

Unity

Unity Software (U) also wants in on the metaverse. The maker of 3D software used in video games and movies is adding an artificial intelligence (AI) component to its ArtEngine software. Much of the content on the metaverse is created using software art packages such as Unity.

As at 11:26 ET (UTC-5) U was down 2% to $126.91. Shares have gained 18% over the past six months.

Online Gaming

Tracing their roots back to the 1990’s, online gaming worlds can also be considered as a metaverse of their own as they connect millions of players worldwide in real time.

Amongst the listed companies with online player bases, investors can look at Roblox (RBLX), Electronic Arts (EA) with its Star Wars and Battlefield franchises and Take-Two Interactive Software’s (TTWO) Rockstar Games makes Grand Theft Auto and Red Dead Redemption 2, two games with thriving online player bases.

Activision Blizard’s (ATVI) World of Warcraft and Call of Duty franchises have kept many gamers glued to their seats – including actor Henry Cavill who missed an important phone call because he was too busy playing World of Warcraft.

Another way to invest in the metaverse are exchange traded funds (ETFs). Rather than investing in an individual company’s shares that have the potential to lose value, an ETF spreads the risk by pooling together more than one company’s shares into an exchange-traded product that typically has lower fees than traditional mutual funds.

Roundhill Investments offers the $933m Meta ETF which tracks stocks in the metaverse.

Vanda Research tracks retail investment flows and released a table of metaverse-related stocks which have received significant inflows since Facebooks name change.

A list of metaverse stocks in the Meta ETF compiled by Vanda ResearchA list of metaverse stocks in the Meta ETF compiled by Vanda Research – Source: Vanda Research

“These stocks will probably become household names in coming quarters if they aren’t already,” Vanda Research said.

Markets in this article

EA
Electronic Arts
133.11 USD
1.14 +0.870%
META
Meta Platforms Inc (Extended Hours)
489.93 USD
-5.28 -1.070%
MTTR
Matterport Inc.
2.28 USD
0.3 +15.540%
MSFT
Microsoft Corp (Extended Hours)
421.06 USD
-0.56 -0.130%
MSFT
Microsoft Corp (Extended Hours)
421.06 USD
-0.56 -0.130%

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The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
Capital Com is an execution-only service provider. The material provided in this article is for information purposes only and should not be understood as investment advice. Any opinion that may be provided on this page does not constitute a recommendation by Capital Com or its agents and has not been prepared in accordance with the legal requirements designed to promote investment research independence. While the information in this communication, or on which this communication is based, has been obtained from sources that Capital.com believes to be reliable and accurate, it has not undergone independent verification. No representation or warranty, whether expressed or implied, is made as to the accuracy or completeness of any information obtained from third parties. If you rely on the information on this page, then you do so entirely at your own risk.

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