Buying back another $40 billion in stock also helps. The narrative around metaverse costs was largely that they should return cash to shareholders rather than dumping so much of it into that incinerator. It looks like the board took that advice.
It's strange to me that people think Reality Labs is an incinerator. Truly, without exaggeration, I think this entire perception is based on the ridiculous early Horizon Worlds screenshots Mark Zuckerberg posted, which did a ton of damage to Meta.
But Horizon Worlds is not The Metaverse, and it's not Reality Labs! It's one part of it. Reality Labs has game studios, the leading VR/AR hardware, all kinds of software packages to make working in the Metaverse possible, like Horizon Workrooms, Horizon Remote Desktop, and quite a bit more. They are quickly developing a fairly insurmountable moat.
Meanwhile, Apple is also dumping billions into AR, but they don't break it out in earnings reports, so no one talks about it.
There are lots of execution risks in Meta's VR strategy. Obviously, if no one ever wants their products for games, work, entertainment, or whatever else, then they will have incinerated an awful lot of money. But I think that's actually the unlikely scenario.
The quarterly losses are very large, but it's an entirely new product line with a very large potential market.
> But I think that's actually the unlikely scenario.
Right, we take opposite sides of the probability here. My preference is just that they direct some of the output from that prodigious cash-generator towards shareholders in the meantime. You know, like Apple does.
The screenshots you’re talking about are of Zuckerberg trying to gin up enthusiasm for the product.
The insurmountable most is surrounding a space that doesn’t make any money. Apple may be investing in AR but they didn’t signal that they are betting the company on it
It definitely isn't when you look at their research videos:
Historically their buyback has only compensated for employee equity comp, not much more. That probably changes a bit going forward
https://www.macrotrends.net/stocks/charts/META/meta-platform...
They were mostly flat in 2018-2020. They were down 4% in 2021 and 5% in 2022.
Looks like you're referencing YoY rates as measured on a quarterly basis from the link above, which is not the same as the absolute percentage of shares.
Likely the pace will rise somewhat with recent job cuts/buybacks, but historically they've mostly just tread water with shares issued via software based comp
That seems compatible with what I said (flat 2018-2020, down 4% in 2021 and 5% in 2022).
> Looks like you're referencing ...
https://s21.q4cdn.com/399680738/files/doc_financials/2020/ar...
As of December 31, 2020, there were 2,406 million shares of Class A common stock and 443 million shares of Class B common stock issued and outstanding.
As of December 31, 2021, there were 2,328 million shares of Class A common stock and 413 million shares of Class B common stock issued and outstanding.
We don't have the end of year figures yet but from the Q3 report:
https://d18rn0p25nwr6d.cloudfront.net/CIK-0001326801/d3f3edd...
2,248,672,204 shares outstanding as of October 21, 2022
402,876,470 shares outstanding as of October 21, 2022
Class A shares [...] 2,262 million [...] outstanding, as of September 30, 2022
Class B shares [...] 403 million [...] outstanding, as of September 30, 2022
Weighted-average shares used to compute earnings per share attributable to Class A and Class B common stockholders (Three Months Ended December 31, 2022): Basic 2,638
Sep 30: 2665
Oct 21: 2652
Q4 average: 2638
Dec 31: ~2615 ?2614. Not bad!
8.2% fewer outstanding shares than two years ago. If that’s “mostly flat” so be it.