Meta stock surged 20.3% the next day to close at a record high after “monumental” earnings. That amounted to a US$200 billion ($269 billion) gain in market value in one day. Meta is now worth US$1.2 trillion. The parent of Facebook also announced its first-ever quarterly dividend of 50 US cents a share and authorised another US$50 billion in share buybacks. It had spent US$20 billion on share repurchases last year and has US$11 billion left from a previous share buyback authorisation.
At the start of pandemic lockdowns in March 2020, I bet with a friend on instant messenger that shares of the social media giant — then called Facebook — could easily double over the next three years. It was a bet that I was sure I was going to lose. The stock price was hovering around US$150 at the time. Within 13 months, Facebook shares had crossed the US$300 mark. But the bar was too low because the bet was made during the market’s pandemic selloff. So, in April 2021, we remade the bet: The stock will go up another US$150 to US$450, or triple the original amount, by April. It was a fun bet; I was sure I would lose.
On Feb 1, the company — since renamed Meta Platform — reported fourth-quarter 2023 earnings. Revenue was up 24.7% in the quarter; engagement was up 24% due to the popularity of short-form videos Reels driven by AI, while free cash flow was up 110%. At the same time, expenses were down 22%. Meta controlled its spending on augmented and virtual reality (AR/VR) and doubled down on artificial intelligence or AI. Net income was up 202% compared to the year-ago quarter.
