By Subrat Patnaik | Bloomberg
Meta Platforms Inc. on Friday became Wall Street’s top comeback kid.
It was only a couple of years back the Facebook owner suffered the single biggest market value destruction in stock-market history. But the company has come a long way since then, on Thursday it dazzled shareholders with yet another impressive quarterly earnings report as the social media giant focuses on cutting back costs and shoring up billions in profits.
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The stock rose 20% Friday, adding roughly $197 billion to its market capitalization. It was the biggest single-session market value addition, eclipsing the $190 billion gains made by Apple Inc. and Amazon.com Inc. in 2022.
“Solid execution, faster growth, and increased capital structure efficiency improve the outlook from here,” Brian Nowak, an analyst at Morgan Stanley, wrote in a note Friday.
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“Meta’s AI pipeline for both users and advertisers is robust, with more tools set to launch and scale throughout ‘24,” he added.
Meta, which reduced headcount by 22% in 2023, unveiled plans for a $50 billion stock buyback, and announced its first quarterly dividend on Thursday, a sign to investors that it has money to spare and a reason for them to stick around.
While the company is making big cost cuts, it continues to spend aggressively on artificial intelligence advancements, namely in generative AI but also on the background technologies to help feed its social media products and power its ad targeting.
The surge bolstered Mark Zuckerberg’s net worth by more than $28 billion on Friday.
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The Meta founder and CEO is already worth more than $140 billion, according to Bloomberg’s billionaire index. He owns about 350 million shares of the company, according to the US Securities and Exchange Commission.
Unless he sells or buys more shares of company stock, and assuming the quarterly dividend remains at the same level, Zuckerberg will also gain off of the company’s dividend payouts to the tune of approximately $700 million per year.
While dividends excite shareholders because they reward investors for just holding the stock, they’re also widely criticized for artificially inflating the stock price without spending on employees or improvements to the underlying business.
This upswing plasters over potential harm to Meta stock after Zuckerberg, alongside other social media company heads, testified Wednesday before the Senate Judiciary Committee about the risks their products pose to young people.
CNN staff writer Eva Rothenberg contributed to this report.
