Meta surges on cost cut, buyback plans; lifts mega-cap stocks
SHARES of Meta Platforms soared nearly 20 per cent in premarket trading on Thursday (Feb 2) as the Facebook parent wooed investors with plans to rein on costs and a new US$40 billion share buyback.
Meta plans to cut costs in 2023 by US$5 billion to between US$89 billion and US$95 billion compared with its earlier outlook of US$94 billion to US$100 billion, with CEO Mark Zuckerberg calling 2023 the “Year of Efficiency.”
The company further boosted investot confidence by forecasting first-quarter sales ahead of Wall Street estimates.
If premarket gains hold, the company would add nearly US$76 billion to its US$401.51 billion market value. The stock slumped about 64 per cent in 2022.
“Promising that 2023 will be a year of efficiency was always likely to go down well with investors concerned about the largesse in spending directed towards the unproven potential of the metaverse,” said AJ Bell, investment director at Russ Mould.
Meta results also sparked a rally in shares of other mega-cap firms that are set to report quarterly results later in the day. Amazon.com and Google owner Alphabet rose about 4 per cent each, while Apple firmed 1.1 per cent.
Shares of social media firm Pinterest added about 5.8 per cent after a report that the online pinboards firm was cutting staff by 150, nearly 5 per cent of its workforce, while Snap added 2 per cent a day after ending nearly 10 per cent lower after the company forecast a decline on current-quarter revenue.
Rate-sensitive tech and growth stocks also got a boost as US Treasury yields retreated after Federal Reserve chair Jerome Powell acknowledged on Wednesday that inflation was starting to ease. REUTERS
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