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Shares of Meta staged a massive rally Thursday after the Mark Zuckerberg-led Facebook parent company beat expectations in its latest quarterly earnings numbers, outlined cost-cutting measures and announced a $40 billion stock buyback, as Wall Street regains faith in the “House of Zuck.”
Meta’s 19.7% surge at market open would be its largest daily percentage gain since July 25, 2013 and the stock’s second-best day since the company went public in 2012, according to Yahoo Finance data.
Its $183 share price is an eight-month high, but Meta is still down more than 50% from its September 2021 peak.
The company “delivered as impressive a print as could be expected given the sky-is-falling narrative around digital advertising and the light-money-on-fire narrative around Meta’s spending levels,” Bernstein analyst Mark Shmulik wrote in a Wednesday note to clients.
Meta tacked on $81 billion in market capitalization Thursday, roughly the combined valuation of the three other largest American social media companies Pinterest ($19 billion market cap), Snap ($18 billion market cap) and Twitter, valued at $44 billion upon billionaire Elon Musk’s purchase of the firm last year.
Zuckerberg’s net worth ballooned by $10.6 billion Thursday, bringing his fortune to $65.8 billion, according to our latest estimates. The Meta boss is now the 16th-richest person in the world, rising six spots thanks to the latest stock surge, surpassing notable names including Indian billionaire Gautam Adani, whose fortune has nosedived considerably in recent days as his empire contends with fraud allegations from short seller Hindenburg Research.
The social media giant changed its name from Facebook to Meta in October 2021 to reflect its commitment to the metaverse, Zuckerberg’s vision for an online experience incorporating augmented and virtual reality. Meta stock is down 42% since the announcement, with investors souring on the company’s diversion from its core digital advertising business and mounting expenses as the macroeconomic environment deteriorated. Other large technology stocks have also slumped recently, with Meta’s 46% loss since the beginning of 2022 slightlty outpacing the declines of Amazon (34%), Alphabet (27%) and Netflix (40%).
“2022 was a challenging year for believers in the House of Zuck with many pushed to the brink or throwing in the towel,” Shmulik wrote. “But it appears that Meta has found their own religion on efficiency/profitability and investors now find a leaner, sharper company before them.”
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