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Why yes, Williams-Sonoma (WSM) is a metaverse company

By Kevin Donovan

17:42, 21 March 2022

Williams Sonoma (WSM) retail store, Maple Grove, MN
Williams-Sonoma virtual visual design tool makes it a leader in metaverse technology – Photo: Shutterstock

Home-furnishings retailer Williams-Sonoma’s (WSM) inclusion in a metaverse-focused exchange-traded fund (ETF) – along with its growing e-commerce presence and virtual interior-design tool – has the San Francisco-based retailer looking like a frontrunner in what some expect to be the future of commerce.

Williams-Sonoma makes up 0.41% of the new ProShares Trust Metaverse ETF (VERS) launched last week.

ProShares Metaverse ETF was down 1.62% at $44.07 per share in Monday afternoon trading it New York. It closed Friday at $44.80, up 3.68% on the day. The exchange-traded fund trades over the New York Stock Exchange (NYSE) Arca exchange under the ticker ‘VERS.’

Williams-Sonoma trades over the NYSE under the ticker ‘WSM.’

Planned since early 2021

ProShares Metaverse ETF (NYSE: VERS) as of 18 Mar. 2022ProShares Metaverse ETF (NYSE: VERS) as of 18 Mar. 2022

The new ETF has been in development since early 2021, said ProShares executive director of thematic investing Scott Helfstein. At the time, the Bethesda, Maryland-based fund manager thought it was too early to achieve the critical mass for an ETF focused on the virtual world of the future known as the metaverse.

The October 2021 announcement that Facebook’s parent company would change its name to Meta Platforms (FB), accelerated the process.

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Williams-Sonoma an e-commerce leader

“Williams-Sonoma has a booming online sales business,” Helfstein said. “But in 2017, Williams-Sonoma bought a company called Outward and the next year they rolled out their virtual design planner tool that allows you to virtually place home furnishings in your house.”

Williams-Sonoma purchased Outward on 21 November 2017, a San Jose, California-based 3-D imaging and augmented reality platform, in a $112m (£84.9m) all-cash transaction.

“With this virtual visual design tool, you can make sure you visualise furniture in your space, and you can map a space like your son’s new apartment before you buy the bunk beds that are too big for the room and need to be returned,” Helfstein added. “The virtual visual design tool is integrated into their business.”

Williams-Sonoma Inc. (NYSE: WSM)

Williams-Sonoma Inc. (NYSE: WSM)Williams-Sonoma Inc. (NYSE: WSM) - Photo: Koyfin

Opportunity for small players

Matterport Inc. (Nasdaq: MTTR)Matterport Inc. (Nasdaq: MTTR) - Photo: Koyfin

To qualify for the underlying tracking index, the Solactive Metaverse Theme Index, a company must derive at least 50% of its revenue from what is deemed metaverse-related operations.

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Another company included in the ProShares ETF is Matterport (MTTR), a relatively small Sunnyvale California-based 3-D mapping company with fewer than 700 employees worldwide and a roughly $2bn market capitalisation. Matterport, which trades over the Nasdaq exchange, makes up 0.74% of the VERS fund.

“Matterport makes the cameras used to map spaces,” noted ProShares’ Helfstein. “They make it possible to have say a virtual walk-through for real estate.”

“Ultimately, we think that’s where the technology goes, we are moving in that direction.”

For example, Matterport technology was used to virtually map the 4,000-year-old ancient Egyptian tomb of Saqqara. “They mapped The Wahty Tomb in Egypt,” Helfstein noted.

Wahty Tomb – Matterport Virtual Tour

 

More convenient than boarding an aeroplane

In order for the metaverse to gain mass adoption, it will have to beyond past the cool factor and provide actual utility for consumers. “The metaverse will have to be competitive with the real, physical, world,” Helfstein added.

While companies such as JPMorgan Chase (JPM), McDonald’s (MCD) and Starbucks (SBUX) have already created virtual retail outlets, something like a virtual coffee shop will have to be comparably convenient for people to use.

“If you are in New York and want to spend time with a friend in San Francisco, a virtual coffee shop is more convenient than boarding an aeroplane for a five-hour flight,” Helfstein opined.

 

Markets in this article

META
Meta Platforms Inc (Extended Hours)
468.55 USD
-3.46 -0.730%
JPM
JPMorgan Chase & Co (Extended Hours)
195.82 USD
-8.32 -4.070%
MCD
McDonald's
268.20 USD
-4.26 -1.570%
MCD
McDonald's
268.20 USD
-4.26 -1.570%
MCD
McDonald's
268.20 USD
-4.26 -1.570%

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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.
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