The shares of Meta Platforms (META) surged more than 20% on Friday on the release of the company’s new shareholder return initiatives and better-than-expected profits and forecast.
According to Bloomberg data, the company’s market valuation increased by about $196 billion during Friday’s rise, setting a record for the stock market. On Friday, Meta shares were trading at about $475; at its lowest point in 2022, the price dropped as low as $90.
As per its 2023 fourth quarter earnings figures, Meta, the parent company of Facebook, the social media giant, is doing very well financially. The business announced a $50 billion share buyback program that should also help investors, and it would provide $0.50 dividends per share to stockholders. The new strategy should result in an additional $175 million in dividend payments to Zuckerberg, who owns around $350 million worth of Meta shares. Zuckerberg could profit an extra $700 million year if Meta keeps paying quarterly dividends at the same pace.
The news represents a dramatic turn around for Meta, since the company’s shares fell by more than 70% in 2022. The company’s shares eventually hit and exceeded its all-time high of $379.38 per share in early January, a level not seen since August 2021.
Also Read: Microsoft Hits $3 Trillion Valuation: Riding the Wave of AI Optimism.
When comparing the fourth quarter of this year to the same period last year, Meta’s total sales increased by 25%, from $32.2 billion to $40.1 billion. Following the announcement, the share price spiked, reaching highs of $461.47 in after-hours trading. This represents a surge of more than 16% from the share price of $394.78, which was last seen on Thursday afternoon before the market closed.
“Our community and business are growing, and we had a good quarter,” CEO and founder of Meta Mark Zuckerberg stated in a news release. “We’ve made a lot of progress on our vision for advancing AI and the metaverse.”
In a webcast presenting the results, Zuckerberg also informed investors that the business will keep funding generative AI research and the metaverse. Zuckerberg declared, “We have invested heavily in AI and the Metaverse for a long time, and we will continue to do so.”
“I continue to anticipate that the upcoming generation of AR, VR, and MR computing platforms will provide a genuine sense of presence, which will serve as the cornerstone of social interactions.”
Over the past ten years, Meta has been investing billions of dollars to increase its processing power for generative AI products that it is integrating into gear like its Ray-Ban smart glasses and apps like Facebook, Instagram, and WhatsApp. At present, Meta’s market capitalization exceeds $1.2 trillion.