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Meta shoots up more than 25% on the stock market due to the repurchase of shares and its cost cuts


The owner of Facebook, Instagram and WhatsApp gains 100,000 million dollars in value and boosts the Nasdaq

Meta Platforms has skyrocketed on the Stock Market.

What was already noted in the non-market hours on Wednesday, has been confirmed with a rise of more than 25% this Thursday, which is the second largest in the stock market history of the company that owns Facebook, Instagram and WhatsApp.

Investors applaud the company's cost-cutting targets and share buyback plan.

Both were presented together with the closing results for 2022, which certify the first drop in revenue in Meta's history.

The revenue drop in the fourth quarter was actually the biggest on record for the company, but somewhat less than analysts had forecast.

Meta's shares lost almost two-thirds of their value in 2022 and therefore those poor results, with a 41% drop in annual profit, were discounted.

Investors and analysts were attentive to the new signals launched by the company.

The revenue forecast for the first quarter (from 26,000 to 28,500 million dollars, compared to 27,900 in the same period of 2022) leaves two doors open at the same time: the one that leads to a return to growth and the one that leads to the worsening of the falls.

Thus, it does not clear the market of doubts.

What they liked the most are the objectives of what Mark Zuckerberg, founder and head of Meta, has called the “year of efficiency”.

The firm has lowered its cost estimate for this year by 5,000 million (to the range 89,000-94,000 million) thanks to savings measures.

The belt is also tightened with investments, which is between 30,000 and 33,000 million (instead of the previous estimate of 34,000 to 37,000 million).

Much of the cost savings comes from laying off 11,000 workers, which Zuckerberg announced last November.

For this and other restructuring expenses, the company has recorded an extraordinary charge of 4,610 million dollars in the 2022 accounts, the year in which it had 86,482 employees, after increasing its workforce by some 14,000 people, 20%.

Along with cost savings, Meta has announced that it is expanding its share buyback plan by $40 billion, a form of shareholder remuneration that has also been applauded by investors.

The rise in the Meta Stock Market (27% two hours after closing) is the largest since the 30% increase in the price in a session in July 2013. In absolute terms, it is its largest increase in market capitalization, of the order of the 100,000 million dollars, depending on the moment of the session.

The rise in the shares of the company founded by Mark Zuckerberg has boosted other values ​​in the sector and the Nasdaq index, which rises more than 3% on a good day for the Stock Market.

Investors believe that the cycle of rate hikes is nearing its end after the meetings this Wednesday of the Federal Reserve and this Thursday of the European Central Bank (ECB).

This Thursday Amazon, Alphabet and Apple present results and analysts and investors will be very attentive to the messages about the future that they can launch.

Source: elparis

All business articles on 2023-02-02

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