Meta Soars by Most in Decade, Adding $100 Billion in Value

Meta’s stock surged Thursday after the company reported Earnings Exceeding Expectationssaid it would buy back billions of dollars of its stock, won a court challenge To the ambition in the so-called Metaverse.

Shares of the tech giant, which owns Facebook, Instagram and WhatsApp, are up more than 24%, the biggest daily gain in almost a decade. , added about $100 billion in market value in a single day. This is comparable to Citigroup’s entire market capitalization.

Meta’s stock, which lost more than 60% at the end of last year, is up more than 50% this year as the mood among technology investors brightened. The Nasdaq Composite, an index that includes many tech companies including Meta, is up nearly 20% this year.

Here’s what’s new on meta:

• The company’s earnings have exceeded expectations and it has announced a large-scale share buyback plan. Revenue for the last three months of last year was just over $32 billion, down 4% year-over-year but beating analyst expectations. On Wednesday, the company also said first-quarter sales beat expectations and announced a $40 billion share buyback after buying back $28 billion in shares last year.

• A flat or even slightly lower is a new uptick. Despite declining revenues, Meta’s core products such as Facebook and Instagram continue to perform well in a difficult economic climate. This has raised sentiment for Wall Street’s business and, at least for now, some of the more pressing concerns that Meta is in imminent danger, from challengers such as Apple, TikTok and other social media companies. has been resolved.

• Meta executives can cut costs when needed. For years, Meta has spent lavishly on ferocious expansion, whether it’s new office shapes, headcount surges, or future-proof technology, with no immediate money-making plans. But in its latest quarter, the company proved it can find areas to cut back when pressured to do so, Meta chief executive Mark Zuckerberg said Wednesday. In his earnings call for 2023, he called 2023 “the year of efficiency.” This includes a spate of office terminations of his leases, redesigning data centers to cut costs, and laying off thousands of what he described as “administrators who manage administrators.” Wall Street welcomed the move.

• Meta can still bring new people to Facebook. The big blue Facebook app surpassed 2 billion daily active users for the first time last quarter. This is a huge milestone and shocking given the scale of the service already.This means that while competition from other social networks is fierce, people are not yet use facebook.

• The virtual reality deal survived legal challenges. on wednesday, federal judge dismissed The Federal Trade Commission has sought to block Meta from spending $400 million to acquire a virtual reality startup called Within. This represents a major legal win for the company as it has invested heavily in the Metaverse, where users work, play and consume content through virtual reality. Augmented reality. (Not very happy for Meta, One month ago A European regulator found that it illegally forced users to effectively accept personalized ads, fined the company more than $400 million, and made costly changes to its advertising business in the EU. could be forced. )

• Many challenges remain. Meta is facing a setback in digital advertising as rising interest rates and inflation curtail client spending. The company is also struggling to retain users drawn to newer apps such as his short-form video app TikTok, which Zuckerberg sees as one of his most formidable rivals. The billions of dollars Meta spends pursuing its founder’s Metaverse vision may not pay off.

• Meta laid off more than 11,000 employees in November. The company cut its workforce by 13% in a series of layoffs. most important job cuts Since its inception in 2004, Meta incurred $4.2 billion in restructuring charges in the fourth quarter. This includes early termination of office leases and employee retirement benefits. The company expects to incur an additional $1 billion in restructuring charges in 2023.