Meta Surges With a Record Gain In Share Value Of $196 Billion

(CTN News) – As a result of its first dividend and strong results, Meta Platforms added $196 billion in stock market value on Friday, marking the biggest one-day gain ever recorded on Wall Street.

The stock surged 20.3% for the session, its biggest one-day gain in a year and its third biggest since its Wall Street debut in 2012. Currently, it has a stock market value of more than $1.22 trillion.

In advance of Facebook’s 20th anniversary, Meta announced a 50 cent quarterly dividend on Thursday and authorized an additional $50 billion in share buybacks.

Normally, dividends are associated with mature, slow-growth companies, but Meta’s is the fourth from Wall Street’s biggest technology heavyweights, along with Apple, Microsoft, and Nvidia.

The dividend payment suggests the company is trying to boost its reputation and be taken more seriously. However, the amount is merely a token gesture, according to AJ Bell investment analyst Dan Coatsworth.

Meta’s market capitalization rose by $190 billion on Friday, surpassing Amazon’s market value surge of $190 billion on Feb. 4, 2022. A dismal forecast by Meta a day earlier caused the company’s stock value to plummet by more than $200 billion, the biggest loss in US stock market history.

CEO Mark Zuckerberg, who owns about 350 million Class A and Class B shares, will get a big payout from Meta’s dividend plan. About $175 million could be paid to the Facebook co-founder each quarter.

With Meta, Nvidia, Microsoft and Broadcom hitting record highs recently, optimism about artificial intelligence contributed to a 24% rally in the S&P 500 last year. As a result of Friday’s gains,

Meta has gained 35% in 2024.

In its fourth-quarter results, the world’s largest social media company posted strong ad sales and a rebound in user growth. Analysts also predicted higher revenue for the current quarter.

Meta’s net income tripled to $14.02 billion after eliminating more than 21,000 jobs since late 2022, resulting in an 8% drop in costs and expenses.

According to Jasmine Enberg, principal analyst at Insider Intelligence, “the ‘Year of Efficiency’ has paid off, as both headcount and costs have decreased.

Its dividend is small compared to many other companies, but it could make Meta’s stock more attractive to a wider range of investors, including exchange-traded funds.

As a result of Friday’s stock rally, Meta’s dividend yield is about 0.4%. Apple’s dividend yield is about 0.5%, Microsoft’s is 0.7%, and Nvidia’s is under 0.1%.

Annex Wealth Management Chief Economist Brian Jacobsen believes this will attract investors who are looking for dividends and more steady income.

Morningstar Direct data shows that Dividend Traded Funds (ETFs) focused on US dividend payers have assets of over $400 billion, accounting for just over 5% of the domestic ETF universe.

Ten years ago, Meta invested billions in expanding its computing capacity to develop generative artificial intelligence products for Facebook, Instagram, WhatsApp, as well as for hardware devices such as Ray-Ban smart glasses.

SEE ALSO:

Rogan’s Spotify Deal Is Worth $250 Million, Podcast No Longer Exclusive To Spotify