Meta follows Chevron with huge buyout that likely signals more to come
Meta and redemption. Meta Platforms CEO Mark Zuckerberg has declared 2023 to be “the year of efficiency”, which seems to translate to “we are finally listening to shareholders and cutting costs”. It made everyone agree. He seems to have finally gotten the memo that investors love when revenues rise and costs fall. Investors like capital returns too, and this $40 billion share buyback announcement certainly falls into that category. With a market cap of $407 billion, that $40 billion is about 10% of market value. And that’s on top of the $10.97 billion buyout that Meta left following pre-clearance. The takeover was no surprise, although its scale certainly was. Meta has actively reduced its number of shares over the past two years. It bought back $28 billion in 2022. That $40 billion isn’t as big as Chevron’s $75 billion buyout, but it’s enough to start the first quarter of 2023 with a bang. Prior to Meta’s announcement, 77 new buyback programs had been announced in January with a total value of $131.5 billion, according to Birinyi. It was a record for January. Here are the big takeover announcements to date: ($5 billion+) Chevron $75 billion Meta $40 billion Mondelez $6 billion BlackRock $5.2 billion Bank of New York Mellon $5 billion UPS $5 billion Marathon Petroleum $5 billion Source: Birinyi If the “soft landing” becomes a reality, you can expect more from it. Last year, US corporations were full of cash, and while we don’t have final Q4 numbers yet, it’s likely to be a banner year. Curiously, we haven’t heard anything from Washington politicians about the takeover of Meta. The same crowd that complained bitterly about the Chevron takeover and why Chevron isn’t taking all the money to drill more oil wells isn’t complaining that Mark Zuckerberg should take profits from Meta and invest more in the Metaverse so that we can all live in Virtual Reality. I’m waiting for the press release.
Meta follows Chevron with huge buyout that likely signals more to come
