Shares in Meta, the parent company of Facebook, surged this week after the company reported earnings that beat expectations and announced it would buy back billions of dollars in its stock.
The tech giant, which also owns WhatsApp and Instagram, also revealed it had beaten a court challenge to its metaverse ambitions.
Meta’s stock climbed more than 23% on the news, its biggest daily gain for ten years which added nearly $100 billion—more than the entire market capitalization of Citigroup—to its market value.
Meta’s earnings for the fourth quarter of 2022 were down 4% from last year, but the $32 billion reported beat analyst expectations. The company also forecasted better than expected first quarter sales and announced $40 billion in share buybacks.
In a statement this week, Meta Chief Executive Mark Zuckerberg said: “Our management theme for 2023 is the ‘Year of Efficiency’ and we’re focused on becoming a stronger and more nimble organization.”
Wall Street welcomed the news that the company was able to trim spending considerably. Zuckerberg spoke of redesigning data centers to make them less expensive, laying off thousands of staff who he described as “managers managing managers” and terminating office leases.
In November, Meta announced more than 11,000 employees had been laid off, cutting its workforce by 13%. It was the biggest round of job losses since the company was founded.
This Wednesday, Meta received a significant boost to its ambitions in the metaverse, where it hopes to build a universal virtual offering. The Federal Trade Commission had requested Meta’s $400 million deal to acquire the virtual reality startup Within be blocked, but a federal judge rejected the move.
Zuckerberg has forged ahead with the company’s pivot towards the metaverse, and has sunk billions into its Reality Labs vertical despite criticism from analysts and activist investors.