Meta is one of our more controversial holdings. Many clients don't like it because it went from $330 a share in January 2022 to $90 in November 2022. Ouch! Also, despite how much we love interacting on our phones, some people view social media companies as the modern equivalent of cigarette companies - highly profitable and selling an addictive product that is bad for society.
Since bottoming out in November, the Meta share price has made a good comeback. On Tuesday, the stock jumped another 7% to $194, on the news that a further 10 000 employees will be retrenched. Even with these job cuts, and those last year, Meta will have more employees than before Covid.
The move shows that CEO Mark Zuckerberg has realised that his company needs to adapt to a new environment where tech-company excesses are frowned upon. In a note to employees he said: "Last year was a humbling wake-up call. The world economy changed".
I expect he will also announce a slowdown in capital spending on their metaverse project. The supercomputers built to run the metaverse could instead be put to work on other exciting products, like building better versions of AI.