Sign up for our free daily newsletter
Get the latest news and some fun stuff
in your inbox every day
Meta Platforms, the parent company of Facebook, Instagram, and WhatsApp, reported numbers on Wednesday night that were very well-received by the market. Shares soared 23% on Thursday after fourth-quarter revenue beat expectations and management announced a $40 billion buyback programme.
Full-year revenue came in at $116.6 billion, down 1%, its first-ever drop in annual sales. Profits fell 41% to $23.2 billion due to a costly round of redundancies and heavy losses in Reality Labs, which houses its metaverse operations.
CEO Mark Zuckerberg announced that the company will focus on efficiency, using AI tools to improve content recommendations after the fallout from Apple's app-tracking changes in 2021. This has already attracted advertisers back to Meta's platforms.
Meta continues to have the four most downloaded apps in the last decade, and its ad-centric business model is proving to be resilient. All those advertisers that left Twitter must go somewhere to attract an audience for their products. Their cash flows are strong and their margins are very good.
The Meta share price has rebounded by 51% in the last month, and more than doubled since its November lows. This is a reminder that patient investors with a long-term orientation will be rewarded. Let's hold this one as it heads back to its all-time highs.
