Meta shares are trading higher after the company reported better-than-expected Q4 financial results, initiated a quarterly dividend of $0.50 per share and announced a $50 billion increase to its share repurchase authorization.
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Benzinga's PreMarket Prep is the #1 go-to source for everything you need to know before the market opens! Join our expert hosts as they break down the latest market trends, analyze key indicators, and provide actionable insights to help you navigate the trading day ahead.
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00:00 Oh my goodness, the party continues in Zuck land.
00:02 I love the title of the show, "What the Zuck?"
00:04 because it is this market and nobody saw this coming.
00:09 I mean, nobody, everybody with their prediction
00:14 and including myself thought that Meta
00:17 would have a tough time going higher
00:20 because it's run so far and we all had it wrong
00:25 because Zuck obviously had some other stuff
00:28 up his sleeve here, AB, bring you in here.
00:32 What's going on Meta?
00:33 Holy mackerel, it won't stop going up.
00:36 - Yeah, let's get to the numbers real quick
00:38 and I do got, I forget who it was,
00:39 but someone in the chat the other day did point out,
00:42 'cause we were talking about how high
00:44 the expectations were for tech stocks.
00:47 They said, "Well, Google's ad numbers
00:50 "actually came in lower than expected.
00:52 "That kind of lowers the bar of expectations for Meta."
00:55 And they were right because I don't think
00:57 the market was expecting this strong of numbers from Meta.
01:02 EPS $5.33 beat the four bucks and 95 estimates,
01:06 sales beat by about a billion.
01:08 That's not really what the market cares about.
01:09 The company announced a dividend, 50 cents a share
01:12 for the first time in its history,
01:14 as well as a $50 billion share buyback.
01:18 So I think that's a further confirmation
01:21 from the company of them just saying,
01:23 "Hey, look, you know that profit cutting
01:25 "or that spending cost cutting initiative
01:28 "we went on last year and the focus on profit,
01:32 "it's working because look at this,
01:33 "we saved so much money.
01:34 "We have $50 billion to buy back our stock.
01:37 "We're gonna offer our investors a dividend."
01:39 So for the people that were saying last year
01:42 or a year and a half ago when Meta got down to like $100
01:45 that, "Hey, this is a value stock now."
01:47 They've been vindicated because-
01:49 - Oh my gosh, were they ever vindicated.
01:51 If you were buying Meta when it got under $100
01:53 and you held it this long, congratulations.
01:56 You are an unbelievable investor, we'll say.
01:59 Buying, pure Buffett, buying when everybody else
02:04 is scared to death and then just rolling
02:08 and it keeps rolling.
02:09 People can't believe it can go higher.
02:10 I mean, they did everything right.
02:11 $50 billion buyback.
02:13 We know Apple has driven its entire last three
02:16 to four years of earnings off of buybacks.
02:19 The growth hasn't been there for the last two years,
02:22 but the buybacks have.
02:23 They just bought the stock and that's bringing
02:25 that share count down, brings that EPS up.
02:28 So if you can't grow the earnings,
02:30 you bring those shares down, the EPS goes up.
02:32 I mean, so now they're gonna play that game here too.
02:35 Unbelievable quarter for Meta.
02:37 So where does it go from here?
02:39 Well, stocks at all time highs.
02:41 When our stocks are all time highs,
02:43 I don't short stocks at all time highs.
02:44 There'll be a thousand people saying today,
02:47 "Short Meta or sell Meta, this can't last.
02:50 This is a ridiculous move.
02:52 It's overvalued, all the hype."
02:54 This is the market where the overvalued stocks
02:57 gets more overvalued.
02:59 That's the market that we're in right now.
03:01 - I mean, paying a dividend.
03:02 I mean, how many people saw that coming down?
03:04 - Nobody.
03:05 - The buyback, I mean, they're just showing confidence
03:08 in the company doing a buyback when the stock
03:10 is at these levels too.
03:12 I mean, I guess the only thing they didn't throw in there
03:14 was a stock split, right?
03:15 (laughing)
03:16 - The trifecta.
03:17 - Yeah, save it for that.
03:19 I'll just give you the pre-market high.
03:21 Pre-market high comes in at 465, 67.
03:25 You can use that as a level, look for some follow through.
03:28 Right now, we're probably way over the expected move as well.
03:32 So if it does come in, we'll look to see
03:36 if it can hold the expected move.
03:37 But right now, that's the only number I can give you.
03:39 They're throwing some volume around here.
03:41 And that's one of our really two great reports
03:45 that we had after the close.
03:47 - Yeah, the Amazon, because it's the other good one.
03:49 - Just real quick before I move on from Meta,
03:51 I was looking at the option chain real quick, Dennis.
03:55 So share price is at $463 right now, we'll call it that.
03:59 Can you guess what the 460, so $3 below the share price
04:04 right now, the 460s that expired today,
04:07 what they were trading at at close yesterday?
04:09 - 50 cents?
04:10 - 18 cents.
04:12 So anyone who bought those 460 calls was like,
04:17 "Hey, I think this thing's gonna go up 20%."
04:19 People were probably like, "You're crazy."
04:20 But if you bought--
04:21 - Hey, I'll sell you that all day long.
04:22 I'd sell those options all day long.
04:25 That looked like a free 18 cents.
04:26 - What about the straddle?
04:28 Can you calculate the straddle?
04:29 - Yeah, so the expected move coming in
04:31 was actually quite significant, Joel.
04:34 It's more than you think.
04:36 Like I didn't know the expected move was gonna be that much,
04:37 but I guess it's $394 stock.
04:39 It was 24 bucks.
04:41 Straddle coming in was $24.
04:42 - But instead it moved, what, 70?
04:44 - Oh yeah, you're getting hurt.
04:46 If you sold the straddle on this one,
04:48 you're crawling under your desk.
04:49 If you sold options on this one,
04:51 you know, if you sold puts, you're laughing,
04:52 but if you sold any calls, you're like,
04:55 "Ah!" you're under your desk
04:57 and you're looking for cover there.
04:58 - So I'm curious what those--
04:59 - I've been there and done that.
05:01 I wrote options for a lot of years.
05:02 I've been on the wrong side.
05:03 Remember the Apple?
05:04 Didn't I write Apple?
05:05 - Yeah, you did.
05:06 - I wrote Apple calls.