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Meta surges on cost cut, buyback plans; lifts mega-cap stocks
Published by Uma Rajagopal
Posted on February 2, 2023
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Published by Uma Rajagopal
Posted on February 2, 2023
(Reuters) – Shares of Meta Platforms Inc soared nearly 20% in premarket trading on Thursday as the Facebook parent wooed investors with plans to rein on costs and a new $40 billion share buyback.
Meta plans to cut costs in 2023 by $5 billion to between $89 billion and $95 billion compared with its earlier outlook of $94 billion to $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 $76 billion to its $401.51 billion market value. The stock slumped about 64% 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 Inc and Google owner Alphabet Inc rose about 4% each, while Apple Inc firmed 1.1%.
Shares of social media firm Pinterest Inc added about 5.8% after a report that the online pinboards firm was cutting staff by 150, nearly 5% of its workforce, while Snap Inc added 2% a day after ending nearly 10% lower after the company forecast a decline on current-quarter revenue.
Rate-sensitive tech and growth stocks also got a boost as U.S. Treasury yields retreated after Federal Reserve chair Jerome Powell acknowledged on Wednesday that inflation was starting to ease.
(Reporting by Medha Singh in Bengaluru; Editing by Vinay Dwivedi)