Meta and the buyback. Meta Platforms CEO Mark Zuckerberg declared 2023 to be the “Year of Efficiency,” which seems to translate into “we’re finally listening to the shareholders and cutting costs.” That got everyone going. He seems to have finally gotten the memo that investors like it when revenues are going up and costs are going down. Investors also like returning capital, and that $40 billion share buyback announcement certainly fit into that category. With a market cap of $407 billion, that $40 billion is about 10% of the market value. And that is on top of the $10.97 billion buyback that Meta has left from a prior authorization. The buyback wasn’t a surprise, though the size of it certainly was. Meta has been actively reducing its share count for the last two years. It bought back $28 billion in 2022. That $40 billion is not as big as Chevron’s $75 billion buyback , but it is enough to start the first quarter of 2023 with a bang. Prior to the Meta announcement, there were 77 new buyback programs announced in January for a total value of $131.5 billion, according to Birinyi. That was a record for January. Here are the big buyback announcements so far: ($5 billion and over) 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 of this. Corporate America was flush with cash last year, and while we do not yet have final Q4 numbers, it’s likely going to be a record year. Oddly, we have had heard nothing from politicians in Washington about the Meta buyback . The same crowd that has been bitterly complaining about Chevron ‘s buyback and why Chevron is not taking all the money to drill more oil wells are not complaining that Mark Zuckerberg should be taking Meta’s profits and investing more in the metaverse so we can all live in Virtual Reality. I am waiting for the press release.
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