Meta has come a long way since the launch of its first product (The Facebook) on the 4th of February, 2004. What started as a university social networking website co-founded by five college students (Mark Zuckerberg, Eduardo Saverin, Andrew McCollum, Dustin Moskovitz, and Chris Hughes) has grown into one of the most valuable companies in the world with a market capitalization of 760.74 billion dollars (October 2023).
This American multinational technology conglomerate (Meta) now has a portfolio of 12 products and services (Facebook, Instagram, Messenger, WhatsApp, Meta Quest, Threads, Horizon Worlds, Ray-Ban Stories, Mapillary, Workplace, and Portal, and employs roughly 66,000 individuals as of October 2023.
The company has had its fair share of controversies, including product downtimes, numerous lawsuits, declining profits, mass layoffs, and political threats. Nevertheless, it has also recorded some victories such as becoming profitable in September 2009, acquiring and merging multiple companies, and recently recording an estimated 3.05 billion users on at least one of its apps every month.
Meta’s Stock Maintains its Strong Standing among Mega-cap Performers
On the 1st of January, 2012, Meta filed for an IPO (initial public offering) to raise $5 billion. Subsequently, each of Meta’s shares was valued at $35 while the company was valued at $104 billion, making it the largest valuation ever recorded for a newly listed public company. As a result of high demand, the company sold 25% more shares and raised $16 billion from the IPO. After the IPO, Meta’s stock had a poor first week (dropping by over 16%) and this sparked controversy and various lawsuits due to claims that the company was hiding growth concerns.
But that’s not all. On the 21st of December, 2013, Meta was added to the S&P 500 index, which measures the performance of over 500 companies listed on the NYSE or Nasdaq. This was a huge win for Meta because when investors bought the index, they were also buying a small share of Meta. While Meta has grown enormously, its position as a tech stock means it is still very volatile.
The S&P500 has seen an increasing representation of tech stocks over the years, but for some traders, this is not enough, and will choose to further embrace the volatility through futures trading. Traders can look at the S&P 500 futures chart to speculate on its future price performance, giving traders the ability to hedge against their investments, access leverage, and short the market if they see an opportunity. A decade after Meta’s addition to the index, Meta Platforms (META) has grown into one of the mega-cap performers in the index.
Six months prior to the release of Meta’s earnings report for the third quarter ended September 30, 2023, the company’s shares surged by over 40%, significantly outperforming the S&P 500 index, which saw only a 2% increase. The year-to-date numbers also paint a pretty picture for META stock, as it saw an impressive increase of nearly 160%; a stark contrast to the 10% rise observed in the S&P 500 index.
Projections for the Future of Meta Platforms
In the Third Quarter 2023 Results Conference Call, Mark Zuckerberg, CEO of Meta, took the time to explain the present activities and future plans of the company. According to Zuckerberg, the big product update for the company in the quarter was the Meta Quest 3 (the first mainstream mixed reality device) and the Ray-Ban Meta smart glasses (the first smart glasses with Meta AI built-in). It was explained that the company used its annual Connect Conference to describe and launch their new consumer AI experiences, which they expect to become a significant part of all Meta apps and businesses in the coming years.
Some of the new products the company started rolling out include Meta AI (AI assistant), AI Studio platform, Emu (an image creation mode), business AIs for sales and support, and plans for the launch of creator AIs. Zuckerberg asserted that the company will focus on operating efficiently because it creates the stability, discipline, and lean culture needed to achieve long-term initiatives in a very volatile world. His speech shows that going forward, Meta’s priority will be artificial intelligence.
