Mark Zuckerberg (Instagram)
Meta/Facebook reported a 35% jump in revenue for the last quarter, Q4 2023 and that it will pay a quarterly dividend for the first time in its history. As a result of the surprise announcement, the company’s stock surged by 20% in Friday’s trading, adding $200 billion to its market cap.
The firm’s shares were trading at about $475 on Friday, up from a low of $90 in 2022. In 2022 some people were even predicting that Facebook was no longer dominant as new generations of social media users were just not interested in it. But in less than two years its stock has rebounded by more than 500%.
The increase in value came despite the recent legal trouble the firm has faced, including a number of major lawsuits, and the poor performance made by its founder, Mark Zuckerberg, in an appearance before the U.S. Senate last week.
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Meta will payout to stockholders a dividend of 50 cents a share on March 26 and will raise its stock buyout by $50 billion. Stock buybacks raise the value of a company even more by increasing the percentage of itself that the firm owns.
In the fourth quarter of 2023, Meta’s revenue was $40.1 billion, at an earnings per share (EPS) of $5.33, up almost 25% from the $32.2 billion in revenue the company had in Q3 2022
Meta is forecasting first-quarter sales to be in the range of $34.5 billion to $37 billion.
Mark Zuckerberg believes that last year’s layoffs helped. He told Meta investors in a conference call, “Being a leaner company is helping us execute better and faster.”
“Moving forward, a major goal will be building the most popular and advanced A.I. products and services,” he added. “If we succeed, everyone who uses our services will have a world-class A.I. assistant to help get things done.”
Ben Barringer, technology analyst at Quilter Cheviot, told CNBC “Mark Zuckerberg is showing that he wants to bring shareholders along with him and is highlighting that Meta is now a mature, grown-up business.”
Last Wednesday, when appearing before the U.S. Senate, before the hearing began, Mark Zuckerberg stood and turned towards all of the people behind him in the gallery and said, “I’m sorry for everything you have all been through. No one should go through the things that your families have suffered and this is why we invest so much, and we are going to continue doing industry-wide efforts to make sure no one has to go through the things your families have had to suffer.”
But the relatives of people who died in incidents said to be related to Facebook and its Instagram messaging app were not impressed.
And the various government lawsuits filed against Meta/Facebook stand, at least for now.
The State of New Mexico filed suit against Facebook/Meta last November charging that the world’s largest social media platform exposes minors to pornography and sexual predators. Meta CEO Mark Zuckerberg is also named in the suit that alleges the social media company failed to adequately protect children from sexual abuse, online solicitation, and human trafficking.
In addition to that, in October a whopping civil suit was brought by 33 US states, led by Colorado and California, alleging Facebook, collects personal information of children under the age of 13 and also caused a mental health crisis among youth by making its Instagram social media platform addictive.
