Meta’s first-ever dividend allays investor fears that the metaverse and AI plans were going to be “an abyss” for money, according to the CEO of a leading independent financial advisory and fintech.
Facebook, Instagram and WhatsApp-parent Meta Platforms said it will pay investors a dividend of 50 cents a share on March 26, as cash swelled to $65.4 bln at the end of 2023 from $40.7 bln from the previous year earlier. The company also announced a $50 bln share buyback.
“This move is a testament to Meta’s commitment to shareholder value and marks a significant shift in perception, not only for the company itself, but also for the broader metaverse and AI sectors,” said deVere Group’s Nigel Green.
“The initiation of dividend payouts and the massive share buyback programme serve as a clear indication that Meta is confident in the profitability of its metaverse and artificial intelligence (AI) ventures,” he said.
“This confidence will have a ripple effect on investor sentiment, transforming scepticism into optimism.”
Green explained that shareholders, who were once concerned about the potential financial pitfalls of these ventures, which many had assumed would be an abyss for money, now see tangible returns on their investments, creating a more positive outlook for Meta and the sectors it operates in.
“As a trailblazer in the development of virtual reality experiences and digital interactions, Meta’s commitment to delivering returns on its metaverse investments instils confidence in the industry’s viability,” he said.
“The dividend payouts and share buyback programme send a strong signal to investors that the metaverse is not just a speculative concept, but a burgeoning market with substantial growth potential.”
Innovative technologies
Similarly, the move resonates positively in the AI sector, where Meta has been channelling significant resources to develop innovative technologies.
The deVere CEO added that, “the company’s commitment to delivering shareholder value while advancing AI capabilities sets a positive inflection point for the broader AI industry.
“Investors, who may have been cautious about the potential financial burdens associated with AI research and development, now see Meta’s strategic financial initiatives as a validation of the sector’s potential for profitability.”
Green has previously commented that almost all investors should have some AI exposure in their investment mix, saying that this is going to reshape whole industries and fuel innovation – and this makes it crucial for investors to pay attention.
“Getting in early allows investors to establish a competitive advantage over latecomers. They can secure favourable entry points and lower purchase prices, maximising their potential profits.
“This tech has the potential to disrupt existing industries or create entirely new ones. Early investors are likely to benefit from the exponential growth that often accompanies the adoption of such technologies. As these innovations gain traction, their valuations could skyrocket, resulting in significant returns on investment,” he noted.
While AI is currently The Big Story, investors should, as always, remain diversified across asset classes, sectors and regions in order to maximise returns per unit of risk (volatility) incurred.
Nigel Green concluded that, “Meta’s initiation of dividend payouts and a substantial share buyback programme has ushered in a new era of confidence for investors, not only in Meta itself but also for the wider metaverse and AI sectors.”
