On Thursday, Meta's shares went up by more than 20 percent after the social media giant reported better than expected fourth-quarter revenue of $32.17 billion. According to Refinitiv, analysts were expecting revenue of $31.53 billion. As the market opened, the social giant was rewarded by investors as Meta stocks surged to $180.41.
The latest stock surge is not so much about Meta beating market expectations. It has more to do with another round of layoffs. During the earnings call, Meta CEO Mark Zuckerberg said the social-media giant will make 2023 the year of efficiency and hinted that more layoffs could be in the offing. Wall Street reacted positively to the news that Meta would initiate a new round of share buybacks.
This is not the first time that Meta has done a stock buyback. In 2021, Meta spent $45 billion on stock buybacks at $330 a share. The company still has a long way to recover its loss, even at the current stock price of $180.
On November 9, Facebook s Meta laid off 13% of its total workforce, or more than 11,000 employees, after losing $700 billion of its value due to a risky metaverse bet.
The affected employees will receive 16 weeks of pay plus two additional weeks for every year of service, according to Zuckerberg. Meta will cover health insurance for six months. Zuckerberg said the company spent around $3.7 billion in 2022 in paying out severance and terminating office leases.
In October 2021, Mark Zuckerberg announced that he will change the name of the company he founded about two decades ago from Facebook to Meta in order to reflect its focus on the metaverse. During the speech, Zuckerberg described the metaverse as an embodied internet where you are in the experience, not just looking at it. We call this the metaverse, and it will affect every product we build. Since rebranding last year, Meta has lost more than 70% of its value, as all its business units continue to get battered on multiple fronts, as a result of the rebrand. YTD, the social giant lost 70% of its value as it fell from $300 to just $100.
Meta believes the metaverse is a game-changing technology and believes early mover advantage will make Meta the first multi-trillion dollar company. Zuckerberg doubled down on losing more money in the metaverse, even though its stocks were cratered.
Meta plans to invest $10 billion in the metaverse to reflect the company's new vision. At the time, Meta plans to hire 10,000 people in the European Union to build a metaverse. Zuckerberg said that the metaverse is a major investment for the company and plays a crucial role in the company going forward.