Meta’s record-breaking stock surge

In recent weeks, Meta, the parent company of Facebook, has experienced a remarkable surge in its stock value. The social media giant’s shares have skyrocketed to unprecedented levels, breaking records and leaving investors astounded. This meteoric rise can be attributed to several key factors.

Firstly, Meta’s strategic shift towards the metaverse has captured the imagination of both investors and users alike. The metaverse represents a virtual reality space where people can interact with each other and digital content in real-time. By embracing this concept, Meta has tapped into a potentially lucrative market that is expected to revolutionize various industries.

Shares of Meta Platforms Inc. soared on Friday as the company reported a blowout fourth quarter and introduced a dividend. That raised the question of whether or not Meta can be called a value stock.

Investors typically consider value stocks to be those of mature companies that are steady performers, are likely to pay dividends to shareholders and trade at relatively low valuations to the broad market.

In our initial earnings preview for Meta, we outlined that the expected stock price movement after the earnings call—based on current implied volatility—was +-$26.66. The stock closed at $394.78 on Feb. 1, and rose to a new all-time high of $485.96 the next day following the stellar earnings call. From the closing price to the peak, that's a $91.18 rally—almost 3.5 times the earnings expectation to the upside.

Following Meta’s stock surge, investors also got excited about shares in social media platform Snapchat which jumped by over 5% on 2 February, causing losses of more than $100m for short-sellers.

Mark Zuckerberg’s net worth soared by $28bn in one day following Meta’s latest jump. He is now the world’s fourth-richest person with a net worth of $170bn, according to Bloomberg.

Additionally, Meta Platforms guided for first-quarter 2024 revenue of $34.5 billion to $37 billion. There’s a beat here, as well, since Wall Street had projected current-quarter revenue of $33.9 billion for Meta Platforms. Therefore, it’s not too shocking that META stock jumped after the company released its data and outlook.

Zuckerberg could also continue to climb his way up the billionaire ranking after receiving an astronomical payout of $700 million annually thanks to Meta’s new quarterly cash dividend of 50 cents per share of common stock beginning this March, which the company revealed in its latest earnings report.

Since Zuckerberg owns a roughly 13% stake in Meta — some 350 million shares — he’s due to receive $175 million per fiscal quarter, according to Bloomberg data.

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 Sarah H

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