Meta Platforms, the parent company of apps like Facebook, Instagram, WhatsApp, and Messenger, announced that its share buyback has increased by $40 billion. This follows the $28 billion in stock that the company bought back.
Here is what we know about the latest buyback:
Meta's 2022 Success
The company's stock has seen a significant rise after the repurchase. Meta has been buying shares back as early as 2017, but they set the quarterly buybacks above the $10 billion mark for the first time since 2021, as mentioned in CNBC.
Meta managed to exceed the revenue estimates of analysts with its fourth-quarter results, which led to its shares increase to more than 17% in after-hours trading. Facebook has also seen an increase in active users, going up to 2.96 billion in the fourth quarter of 2022.
Although looking at the bigger picture, the rise in active users is not as big as the company would want. The third quarter of 2022 had 2.95 billion users, while the second quarter had 2.93 billion. It is also not a huge leap from Q4 2021's 2.91 billion active users.
Social Media Today mentioned that there was an uptick in Facebook usage in Q4 2022, which has been brought in by Reels. Mark Zuckerberg believes that it indicated success in the company's AI recommendation systems.
The success of Reels is a particularly good sign for Facebook given that it has been competing with the short-form video social media app TikTok for a while. He also mentioned that 2023 will be the "Year of Efficiency," and that they aim to become a stronger and more nimble organization.
Meta's Facebook Reality Labs
Although Meta's revenue appears to be fine, the same cannot be said for its metaverse project in the Facebook Reality Labs division. The augmented reality (AR) and virtual reality (VR) project has been losing money for a while now.
Reality Labs had a loss of $4.3 billion in the fourth quarter of 2022. Although it did not exceed the estimated $4.4 billion loss from analysts, a loss is still a loss, and it is an increase compared to the $3.7 billion loss in the third quarter of 2022.
Overall, Meta lost $13.7 billion in the Reality Labs division on revenue of $2.2 billion. Meta even admitted that the Facebook Reality Lab is expecting a more significant loss in 2023, but Meta will continue investing in the project saying that it's a crucial part of its future.
Investors are not too happy with that decision, as they already aim to reduce the number of resources the company is spending on the metaverse project. This is due to the fall in user growth and the project cutting into its profits for funding.
CEO Mark Zuckerberg remains optimistic about the project, saying that he expects the division to grow significantly over the years, according to Coindesk. Zuckerberg expressed that the to-be-released VR headset will be the baseline for all headsets going forward.
