• The Seville Reporters

In Focus: The Metaverse, Bet on David not Goliath

Updated: Nov 1

In my eyes there is no bigger underachiever in the public markets than AT&T ($T). Currently, AT&T is valued at $180 billion, but it should be worth so much more. The reason behind my assumption is because AT&T was the dominant name in home telephone service in the 80s and 90s. In the mid 90s, as more Americans started to buy computers and get online, phone companies like AT&T and Verizon ($VZ) were excited to collect money from households getting additional phone lines just for internet use. To those companies, AT&T and Verizon, the revenue stream from dial up internet was going to last forever, but it didn't.

AT&T did embrace the internet, as can be seen in their 1996 annual report, but I always felt they could've done more. I believe AT&T could've been what America Online was, but it lacked vision.

Intel ($INTC) is another company that I've seen underachieve. Believing that PC sales would grow forever, the company was late to mobile, and it has cost them dearly.

With Facebook ($FB) announcing its name change to Meta Platforms last week, the buzz around the Metaverse has amped up. Investors are scrambling to place their bets on the company that will dominate the Metaverse and become the next billionaire maker. The name change and the scramble to invest in the Metaverse is what prompted me to think about AT&T and Intel this week.

What Seems Obvious Doesn't Always Work Out

If I had an investment decision to make in the early 90s on which company would benefit the most from the internet, I would've likely picked AT&T; and if I was told in the mid 90s that almost everyone was going to have a cellphone by 2010, and to make an investment based on that knowledge, I would've likely gone with AT&T as well.

For Intel, If I had to make an investment in 2000 based on computers and electronics going mobile, Intel would have been the easy choice, if not them then Microsoft, because why wouldn't a company that's dominated desktop computers not also conquer mobile computing?

In both cases I would've been wrong. American Online went on to do what it did, which is make early investors in the internet rich. And eventually access to the internet was taken over by cable companies, which AT&T had to transform itself into to keep up. Instead of Intel, if I made an investment in a little known company named Skyworks Solutions ($SWKS) in 2000, I would be up over 456% today, and that doesn't include the dividend payments, Intel has only gained 17% in that same timeframe.

While most Metaverse investment articles will point you to the same few names, Facebook, Apple