Meta Platforms (META) CEO Mark Zuckerberg saw his fortune rise by $12 billion on Feb. 2 as the the social media company's share rebounded on projections of higher revenue growth and a stock buyback program.
His net worth increased by $12.5 billion when shares of Meta gained by as much as 28.2% on Feb. 3.
Shares of Meta, the owner of Facebook, Instagram, and WhatsApp, rose by 30.5% during the past five days after falling by 18% over the past year
Zuckerberg is worth $69.8 billion, an increase of $24 billion year-to-date as of Feb. 2, according to the Bloomberg Billionaires Index. He is ranked as the 13th richest person in the world.
Meta Reaches $500 Billion Market Cap Again
Meta reclaimed its market capitalization of roughly $500 billion after a slump last year that occurred throughout the technology sector as businesses began cutting back on spending in advertising and capital expenditures.
The company unveiled plans for a $40 billion stock buyback and forecast better-than-expected current quarter revenue despite a broader global slowdown in ad spending.
The stock increase on Feb. 2 was Meta's best single-day gain in more than a decade, lifting it back above the $500 billion market cap threshold for the first time since last July.
Meta reported softer-than-expected fourth quarter earnings of $1.76 per share, shy of the Street's $2.22 forecast, due to a $4.2 billion charge linked to last year's massive layoffs and office closures.
Meta edged past analysts' revenue estimates with a $32.17 billion tally -- around 97.2% of which came from advertising sales. That figure is set to fall to between $26 billion and $28.5 billion this quarter, but was close to Refinitiv's estimate of $27.1 billion.
Daily active users across the family of apps were up 4% from last year to around 2 billion in December, as Meta continues to ramp its short-form video offering, 'Reels'. Monthly active users were up 2% to around 2.96 billion.
The stock mostly moved because of the $40 billion buyback plan along with Meta's pledge to lower operating expenses by $6.5 billion to a range of $89 billion and $95 billion.
The budget for capital spending was also cut and will decline by $4.5 billion from last year to between $30 billion and $33 billion. Meta seeks to redesign some of its data centers to become more efficient as Zuckerberg transitions from a company leader focused on growth to one seeking to instill cost discipline and maturity across the whole of its business.
Last November, Meta Platforms, cut 13% of its staff to curb costs.
"We closed last year with some difficult layoffs and restructuring some teams. And when we did this, I said clearly that this was the beginning of our focus on efficiency and not the end," Zuckerberg told investors on a conference call.
"I think that there is going to be some more that we can do to improve our productivity, speed and cost structure," he said. "And by working on this over a sustained period, I think we will both build a stronger technology company and become more profitable."
Analysts Upgraded Meta's Stock Rating
Analysts were upbeat about Zuckerberg's strategy and focus on cost-cutting, especially his multiple references to 'efficiency' during the earnings call.
Bank of America boosted its rating to 'buy' from 'neutral', with a $60 increase to its new $220 price target.
Morgan Stanley was also impressed, lifting its price target by $60 to $190 per share while keeping its 'equal weight' rating in place.
"As Meta shows increased discipline while it has multiple near-term catalysts in Reels monetization ramping, messaging ads further scaling, and AI improving targeting and measurement, we expect growth rates to improve through 2023, helping to grow profitability and free cash flow," said JMP Securities analyst Andrew Boone, who carries a 'market outperform' rating with an improved $210 price target on the stock.
"This as we believe competition from TikTok has lessened (at least for user time) and engagement across Meta remains healthy," he added.
