Meta Platforms. Do call it a comeback?
The Facebook/Instagram/WhatsApp owner's stock is surging this year. Does Zuckerberg have his mojo again?
It’s been a challenging couple of years for Mark Zuckerberg and Meta Platforms.
The social media company formerly known as Facebook has been losing billions of dollars on its Reality Labs metaverse unit. Zuck’s long-time business partner, Sheryl Sandberg, stepped down as COO last year and left the company. And perhaps the biggest problem? Many younger social media users (i.e. my teenage son and his friends) are more interested in TikTok and Snapchat. Facebook and Insta are for “the olds” — namely my Gen X age cohort and (gulp) my Boomer and later Silent Generation era parents, in-laws, other older relatives and their contemporaries.
But even though Meta faces some longer-term (and shorter-term) concerns, the company has enjoyed a stellar comeback this year. The stock has more than doubled, making it one of the best performers in the S&P 500.
Revenues are growing again, albeit sluggishly, following a couple of consecutive quarters of declines. And Wall Street also seems to appreciate that Meta is in cost-cutting mode. Translation? Meta, like many other tech and media companies, have had to lay off a LOT of employees.
Still, it’s worth noting that despite the ups and downs for Meta, the stock has still been a long-term winner since Facebook’s initial public offering eleven years ago.
Facebook went public at a price of $38 a share on May 18, 2012. The stock didn’t do much on its IPO day and shares quickly fizzled after that, losing more than half their value in just a few months. The big concern back then? Investors were worried that Facebook wasn’t pivoting quickly enough to the rapidly emerging mobile advertising world. Those fears turned out to be for naught of course.
Flash forward to today. Meta stock trades for about $243 a share. That’s a more than 535% gain from the IPO price. Meta has easily outperformed the S&P 500 and Nasdaq since it has been a public company. And Meta has a market cap of more than $620 billion, making it one of the most valuable companies on the planet.
To be sure, critics will note that Meta was once worth more than a trillion dollars. The stock is down almost 40% from the all-time high it set in September 2021. But despite the continued criticism of Meta in some corners, it’s clear that Meta remains one of the most influential firms in Corporate America, a leader in digital advertising along with Google and YouTube owner Alphabet and one of the top stocks for individual investors who’ve stuck with Zuck for the long haul.