Meta has taken drastic measures to try to regain the trust of reflectors after the punishment of the last few weeks. On the one hand, the company agreed to distribute a new actual dividend, and on the other hand, its authorized advisor, Mark Zuckerberg, announced that the company plans to cut up to 30% and hypothesize on the controversial Metaverse, a controversial strategic decision that the company launched four years ago, and even caused it to change the name of the company, leaving behind the original name of Facebook.
With these moves, Meta shares were able to rise by more than 7%. These announcements came at a time of correction in the company’s stock exchange, which, before this session, had lagged by 15% since the end of October and by 20% since the annual maximum recorded in mid-August, between doubts about valuations around IA and the reverse effort by the company to develop the infrastructure of its business.
Therefore, Meta’s Board of Directors approved a new quarterly dividend of $0.525 per address, which will become effective on December 23. It’s the same issue as in previous quarters. Today, the latest increase announced in February of this year is 5%. In the third quarter of the year, $1,330 million was allocated to pay dividends, an increase of 5.3%, and the disbursement in the first months of the year was set at $3,986 million, an increase of 5%.
Conversely, Mark Zuckerberg’s company halted shares allocated for stock buybacks by 62%, with a total value of $3,327 million. Between this year and September, addresses were bought back for 26.248 million, 13% less than in the same period of the previous exercise.
The decision to reduce investments in Metaverse was well received by investors and analysts, who always had doubts about profitability. According to Bloomberg Intelligence, this cost reduction, coupled with the potential use of Google’s stress processing units instead of its own ASIC chips, could improve free cash flow (FCF) in the range of $10,000 million to $12,000 million. Of course, you need to plan to cut your spending in the metaverse by up to 30%, which could reduce your operating expenses by 5,000-6,000 million, while the company is also looking for a larger 10% cut in its other businesses.
The company is immersed in a financial restructuring process to make significant investments in AI infrastructure. At the beginning of November, a $30,000 million bond issuance was completed, in what was the largest placement of obligations of an investment-grade company in the United States since 2023. Days earlier, a $27,000 million financing agreement was concluded with Blue Owl Capital to finance the installation of Hyperion Data Centers, at EE UU.
In this scenario, and in presenting third-quarter results, Meta had raised estimates of capital expenditures (permanent biennial investments) for this year, to a range of $70,000 to $72,000, compared to a previous forecast of $66,000 to $72,000 million. The company acknowledged that its current forecasts indicate that capital expenditure growth in dollars will be significantly greater in 2026 than in 2025.
In terms of calculations, Meta recorded a net benefit of $2,709 million in the third quarter, 83% lower, and below market expectations, as a result of a provision of $15,930 million derived from the implementation of the so-called One Big Beautiful Law.
Meta, which is facing changes in the field of artificial intelligence, with the departure of Yan to be the chief scientific officer of this technology company, may also face a new dispute with the European Commission. Brussels is planning a new antitrust investigation into Meta, to launch artificial intelligence functions in WhatsApp.