Tom Nash

Beware of Post Earnings Meta Stock Hype

Added 2023-02-05 11:27:14 +0000 UTC

Meta stock is flying high after the "brilliant" earnings with a 50% jump, but how good were the earnings really? The revenue is down from 2022 by about 5%. Operating expenses are up 22%! Net income is down 40%! EBITDA is down from 54.7 billion to 42.2 billion which is about 40% give or take. Cash is down from 48 billion at the end of 2021 to 40.7 billion at the end of 2022.

So why did the stock fly high so much? one word: Buybacks. Maybe its 2 words? not sure, but you get my point. spending 40 billion on buybacks is no joke, especially since its literally 100% of your current cash reserves! smells funny to me that Meta will dump all its cash right now for a buyback like that.

Buybacks are a great way for companies to comminate trust in their business. But a buyback is not the answer to problematic fundamentals.

Be very careful guys.