Meta shares surge 17% after announcing first-ever dividend

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Meta founder and CEO Mark Zuckerberg speaks during Meta Connect event at Meta headquarters in Menlo Park, California on September 27, 2023.

Josh Edelson | AFP | Getty Images

Shares of Facebook parent company Meta jumped Friday, after the firm reported a threefold jump in fourth-quarter profit and issued its first-ever dividend.

As of around 6 a.m. ET, the stock price of Meta was up roughly 17% in U.S. premarket trading.

Revenue rose 25% in the fourth quarter for Meta, from $32.2 billion a year earlier. That’s the fastest rate of growth for any period since mid-2021, and comes amid a rebound in the online ad market. Meta’s net income more than tripled, to $14 billion from $4.65 billion a year earlier.

First-ever dividend

Meta said it would pay investors a dividend of 50 cents a share on March 26, in the company’s first-ever cash dividend. That comes after cash and equivalents swelled to $65.4 billion at the end of 2023, from $40.7 billion a year earlier.

Meta also announced a $50 billion share buyback.

Investors praised the dividend announcement.

Ben Barringer, technology analyst at Quilter Cheviot, said this represented a “symbolic moment and indicates what a turnaround story Meta has been on since its struggles in 2022.”

“Mark Zuckerberg is showing that he wants to bring shareholders along with him and is highlighting that Meta is now a mature, grown-up business,” Barringer said in emailed comments.

Investors have also been focusing on Meta’s moves in the artificial intelligence space. The company has a stake in the ground in AI with its LLaMA large language model, a competitor to Microsoft-backed OpenAI’s GPT-4.

Barringer called Meta a “closet AI winner” and said the company’s AI, while not out in show, “will be better servicing advertisers and making the ads themselves more relevant for users.”

Cash dividends are a rare step for technology companies, which tend to be valued by investors on their ability to achieve high growth rates that requires cash investments back into the business.

‘Year of efficiency’ pays off

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