Meta stocks skyrocketed Thursday morning, on pace for its second-best day in almost ten years, as investors were encouraged by a $40 billion stock buyback and CEO Mark Zuckerberg’s commitment to making 2023 a “Year of Efficiency,” CNBC reported.
Despite the fact that the company saw profits plummet by 55% in the fourth quarter of 2022, compared to the same time in 2021, the large buyback and a forecasted rebound in sales gave investors confidence, the WSJ reported. The company’s apparent refocus on profits also encouraged investors, after many expressed discontent with the billions it lost on virtual reality as its stocks plunged by roughly 65% in 2022, according to CNBC.
“2022 was a challenging year for believers in the House of Zuck with many pushed to the brink or throwing in the towel” Mark Shmulik, analyst at investment firm Bernstein, told clients Wednesday, according to Forbes. “But it appears that Meta has found their own religion on efficiency/profitability and investors now find a leaner, sharper company before them.”
Facebook parent co Meta stock value jumps by over 20% after announcing $40 billion stock buyback. Wild that this is legal pic.twitter.com/kCYT4UCCjQ
— Ken Klippenstein (@kenklippenstein) February 2, 2023
In an earnings call following the release, Zuckerberg also committed to being more “proactive” about cutting underperforming projects and “removing layers of middle management to make decisions faster,” CNBC reported. Meta sees AI as a key component of its recovery plan, allowing the company to improve its ability to target users with ads and short-form videos, the WSJ reported, citing internal documents.
Despite the company’s virtual reality department posting a $13.7 billion loss in 2022, chief financial officer Susan Li said that the company does not intend to make cuts to its virtual reality program in the near future, CNBC reported. The company had been gunning for 500,000 monthly active users for its flagship Horizon Worlds virtual reality program, but internal documents showed that it had less than 200,000 per month in October with no more recent public data available, the WSJ reported.
Meta this week also won a legal battle with the Federal Trade Commission this week, when a judge denied the agency’s challenge to Meta acquisition of virtual-reality startup Within Unlimited. The victory was the first major setback to FTC Chair Lina Khan, who was appointed in part to boost the Biden administration’s antitrust enforcement, according to Bloomberg.
At time of writing, Meta stock was up roughly 24.5%, trading at around $190.50, according to Google Finance. Meta did not immediately respond to a Daily Caller News Foundation request for comment.
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