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Buying back another $40 billion in stock also helps. The narrative around metaverse costs was largely that they should return cash to shareholders rather than d

Buying back another $40 billion in stock also helps. The narrative around metaverse costs was largely that they should return cash to shareholders rather than dumping so much of it into that incinerator. It looks like the board took that advice.

jlmorton 4y ago
> rather than dumping so much of it into that incinerator. It's strange to me that people think Reality Labs is an incinerator. Truly, without exaggeration, I think this entire perception is based on the ridiculous early Horizon Worlds screenshots Mark Zuckerberg posted, which did a ton of damage to Meta. But Horizon Worlds is not The Metaverse, and it's not Reality Labs! It's one part of it. Reality Labs has game studios, the leading VR/AR hardware, all kinds of software packages to make working in the Metaverse possible, like Horizon Workrooms, Horizon Remote Desktop, and quite a bit more. They are quickly developing a fairly insurmountable moat. Meanwhile, Apple is also dumping billions into AR, but they don't break it out in earnings reports, so no one talks about it. There are lots of execution risks in Meta's VR strategy. Obviously, if no one ever wants their products for games, work, entertainment, or whatever else, then they will have incinerated an awful lot of money. But I think that's actually the unlikely scenario. The quarterly losses are very large, but it's an entirely new product line with a very large potential market.
- __derek__ 4y ago
  To abuse the metaphor a bit, incinerators generate energy. It's entirely possible that Zuck and Co. have been capturing the energy produced by this one in order to help propel the company forward in the future. > But I think that's actually the unlikely scenario. Right, we take opposite sides of the probability here. My preference is just that they direct some of the output from that prodigious cash-generator towards shareholders in the meantime. You know, like Apple does.
- jjfoooo4 4y ago
  Horizon Worlds is what Meta chose to showcase, so it’s pretty reasonable to draw the conclusion that it’s the best they can do right now. The screenshots you’re talking about are of Zuckerberg trying to gin up enthusiasm for the product. The insurmountable most is surrounding a space that doesn’t make any money. Apple may be investing in AR but they didn’t signal that they are betting the company on it
  - threeseed 4y ago
    > it’s pretty reasonable to draw the conclusion that it’s the best they can do right now It definitely isn't when you look at their research videos: https://www.youtube.com/watch?v=4P3DMMwvCfY https://www.youtube.com/watch?v=4P3DMMwvCfY
zenmaster10665 4y ago
People forget that stock buybacks also create a pool of equity for employee compensation, it isn't just about returning capital tax effectively
- adam_arthur 4y ago
  In fact, despite years of buybacks, Meta's outstanding shares have been mostly flat. Historically their buyback has only compensated for employee equity comp, not much more. That probably changes a bit going forward https://www.macrotrends.net/stocks/charts/META/meta-platforms/shares-outstanding https://www.macrotrends.net/stocks/charts/META/meta-platform...
  - xxpor 4y ago
    I'm trying to figure out if there's a tax advantage to anyone from an RSU + buyback scheme vs straight cash to employees. Seems like it'd be net 0?
    - grogers 4y ago
      I don't think it's about tax advantages but flexibility for the conpany. RSUs usually vest over several years. If times get tough you can slow/stop buybacks. Eventually that would have an effect on the price from dilution but it'd be slow. You can't just not pay out cash awards that have already been scheduled (unless you opt for layoffs, but that's a big hammer).
    - zenmaster10665 4y ago
      It's also about aligning employee incentives with company success
  - kgwgk 4y ago
    > In fact, despite years of buybacks, Meta's outstanding shares have been mostly flat. They were mostly flat in 2018-2020. They were down 4% in 2021 and 5% in 2022.

jlmorton 4y ago

> rather than dumping so much of it into that incinerator. It's strange to me that people think Reality Labs is an incinerator. Truly, without exaggeration, I think this entire perception is based on the ridiculous early Horizon Worlds screenshots Mark Zuckerberg posted, which did a ton of damage to Meta. But Horizon Worlds is not The Metaverse, and it's not Reality Labs! It's one part of it. Reality Labs has game studios, the leading VR/AR hardware, all kinds of software packages to make working in the Metaverse possible, like Horizon Workrooms, Horizon Remote Desktop, and quite a bit more. They are quickly developing a fairly insurmountable moat. Meanwhile, Apple is also dumping billions into AR, but they don't break it out in earnings reports, so no one talks about it. There are lots of execution risks in Meta's VR strategy. Obviously, if no one ever wants their products for games, work, entertainment, or whatever else, then they will have incinerated an awful lot of money. But I think that's actually the unlikely scenario. The quarterly losses are very large, but it's an entirely new product line with a very large potential market.

__derek__ 4y ago
To abuse the metaphor a bit, incinerators generate energy. It's entirely possible that Zuck and Co. have been capturing the energy produced by this one in order to help propel the company forward in the future. > But I think that's actually the unlikely scenario. Right, we take opposite sides of the probability here. My preference is just that they direct some of the output from that prodigious cash-generator towards shareholders in the meantime. You know, like Apple does.
jjfoooo4 4y ago
Horizon Worlds is what Meta chose to showcase, so it’s pretty reasonable to draw the conclusion that it’s the best they can do right now. The screenshots you’re talking about are of Zuckerberg trying to gin up enthusiasm for the product. The insurmountable most is surrounding a space that doesn’t make any money. Apple may be investing in AR but they didn’t signal that they are betting the company on it
- threeseed 4y ago
  > it’s pretty reasonable to draw the conclusion that it’s the best they can do right now It definitely isn't when you look at their research videos: https://www.youtube.com/watch?v=4P3DMMwvCfY https://www.youtube.com/watch?v=4P3DMMwvCfY

zenmaster10665 4y ago

People forget that stock buybacks also create a pool of equity for employee compensation, it isn't just about returning capital tax effectively

adam_arthur 4y ago
In fact, despite years of buybacks, Meta's outstanding shares have been mostly flat. Historically their buyback has only compensated for employee equity comp, not much more. That probably changes a bit going forward https://www.macrotrends.net/stocks/charts/META/meta-platforms/shares-outstanding https://www.macrotrends.net/stocks/charts/META/meta-platform...
- xxpor 4y ago
  I'm trying to figure out if there's a tax advantage to anyone from an RSU + buyback scheme vs straight cash to employees. Seems like it'd be net 0?
  - grogers 4y ago
    I don't think it's about tax advantages but flexibility for the conpany. RSUs usually vest over several years. If times get tough you can slow/stop buybacks. Eventually that would have an effect on the price from dilution but it'd be slow. You can't just not pay out cash awards that have already been scheduled (unless you opt for layoffs, but that's a big hammer).
  - zenmaster10665 4y ago
    It's also about aligning employee incentives with company success
- kgwgk 4y ago
  > In fact, despite years of buybacks, Meta's outstanding shares have been mostly flat. They were mostly flat in 2018-2020. They were down 4% in 2021 and 5% in 2022.