Facebook owner Meta sees shares up 25% after cost cuts and buyback
Meta shares were a whopping 25% amid plans to cut costs and give a $40 billion share buyback. In terms of guidance, Meta forecast Q1 revenue between $26bn and $28.5bn, in line with analysts’ average estimates of $27.1bn.
(Video Transcript)
Meta shares surge
Meta Platforms, which owns Facebook, was in absolute lift-off mode last night. It jumped 25% on the IG platform last night in extended trade as a result of news that came out after the bell.
Investors gave little interest to earnings and revenue, where fourth quarter (Q4) net income fell to a $1.76 per share, much lower than the $2.26 expected. A drop was largely due to a $4.2 billion charge related to layoffs and office closures. Revenue reached a whopping $32.17 billion.
Share price chart
Now, let's take a look at what's been happening with shares because there was absolute lift-off last night.
As I said, a straight up candle this is a Marubozu candle. You can see where it started at yesterday's session at the low point. And it ended without any sellers in this market at all, up a total of 25.12%. This is after chief executive Mark Zuckerberg described 2023 as the year of efficiency and updated the market on a series of cost cutting measures like its plans for lower data centre construction expenses this year and pledged stricter cost control.
And we remember the group parted with more than 11,000 jobs back in November, which did cost that money and a one-off. In total Meta Platforms to cut costs in 2023 by $5 billion to a range of between $89 billion to $95 billion.
The group also announced a new $40 billion share buyback program in terms of guidance, better forecast first quarter revenue between $26bn and $28.5bn in line with analysts, average estimates of $27.14 billion. But it was good news for investors last night in Facebook owner Meta.
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